During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 2 924, 594, 486, 756, 339, 309, 417, Sales (@ $60 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $255,000 fixed each year. $ 177,o The company's $33 unit product cost 'is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($276, + 23, 000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: 10 2 12 $ 33 Units produced Units sold Required: Year 1 23,000 18,000 Year 2 23,000 28,000 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.