During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $6e per unit) cost of goods sold (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,989, eee 576,000 584,000 384, eee $ 200, eee Year 2 $ 1,680,eee 896, eee 784,800 334,90 $ 450, eee $3 per unit variable, $250,000 fixed each year. The company's $32 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (5322,000 - 23,000 units) Absorption costing unit product cost $6 11 1 14 $ 32 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23, 18, eee 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