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 ($36 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,080,000 648,000 432,000 309,000 $ 123,000 Year 2 $ 1,680,000 1,008,000 672,000 339,000 $ 333,000 $3 per unit variable: $255,000 fixed each year, The company's $36 unit product cost is computed as follows: $ 5 Direct materials Direct labor Variable manufacturing overhead Yixed manufacturing overhead ($437.000 - 23.00 units) Absorption costing unit product cont 4 19 $36 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28,000 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