During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 Year 2 $ 900,000 $ 1,500,000 480,000 800,000 420,000 700,000 292,090 322,800 $ 128,000 $ 378,000 $3 per unit variable: $247,000 fixed each year. The company's $32 unit product cost is computed as follows: $ 5 18 5 12 $ 32 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($240,000 + 20,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 20,000 20,000 Units sold 15,000 25,000 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