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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

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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 (@ $37 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,200,eee 740,000 460, eee 385, eee $ 155,000 Year 2 $ 1,800,000 1, 112, eee 690,000 335, eee $ 355, eee $3 per unit variable: $245,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($480,888 = 25,000 units) Absorption costing unit product cost $ 6 12 3 16 $ 37 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,eee Year 2 25,800 30,000 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

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