During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows Sales ( 560 per unit) Cost of goods sold ($42 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,020,000 714,000 306,000 303,000 $ , Year 2 $ 1,620,000 1,134,00 456,eee 333,000 $ 153,000 - $3 per unit variable: $252,000 fixed each year. The company's $42 unit product cost is computed as follows. $ Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (5418,000 + 22,eee units) Absorption costing unit product cost 9 9 5 19 $ 42 Forty percent of fixed manufacturing overhead consists of wages and salaries, the remainder consists of depreciation charges on production equipment and buildings Check my w Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 22,000 22,000 Units sold 17,eee 27.ee Required: 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 1 Year 2 Net operating income (los) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Yeart Year 2 Variable costing net operating income (105) Less: Fixed manufacturing overhead cost released from entory under absorption costing Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing net operating income