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

	Year 1			Year 2
Sales (@ $62 per unit)	$	1,054,000		$	1,674,000
Cost of goods sold (@ $34 per unit)		578,000			918,000
Gross margin		476,000			756,000
Selling and administrative expenses*		301,000			331,000
Net operating income	$	\175,000\		$	425,000

* $3 per unit variable; $250,000 fixed each year.

The companys $34 unit product cost is computed as follows:

Direct materials	$	8
Direct labor		9
Variable manufacturing overhead		2
Fixed manufacturing overhead ($330,000 22,000 units)		15
Absorption costing unit product cost	$	34

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 operatons are:

	Year 1	Year 2
Units produced	22,000	22,000
Units sold	17,000	27,000

Check my work During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: points Sales (@ $62 per unit) Cost of goods sold (@ $34 per unit) Gross margin Selling and administrative expenses Net operating income Year i $ 1,054,000 578,000 476,000 301,000 $ \175,000 Year 2 $ 1,674,000 918,000 756,000 331,000 $ 425,000 eBook Print $3 per unit variable; $250,000 fixed each year. References The company's $34 unit product cost is computed as follows: $ Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($330,000 + 22,000 units) Absorption costing unit product cost $ 34 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 operatons are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27,000 Check my Production and cost data for the first two years of operatons are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27,000 10 points eBook 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. Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product cost $ 22 ( Required 1 Required 2 >