During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (e $64 per unit) Cost of goods sold ($36 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,216,000 684,000 532,000 307,000 $ 225,000 Year 2 $ 1,856,000 1,044,000 812,000 337,000 $ 475,000 *$3 per unit variable; $250,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead ($288,000 - 24,000 units) Absorption costing unit product coat $ 7 13 4 12 $36 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: $3 per unit variable: $250,000 fixed each year, The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead ($288,000 - 24,000 units) Absorption costing unit product cost $ 7 13 4 12 $36 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings, Production and cost data for the first two years of operations are: Units produced Units sold Year 24,000 19,000 Year 2 24,000 29,000 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