During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@$60 per unit) 900,000 $ 1,500,000 Cost of goods sold (@$42 per unit) 630,000 1,050,000 Gross margin 270,000 450,000 Selling and Admin expense 293,000 323,000 Net operating income (23,000) 127,000 *$3 per unit variable: $248,000 fixed each year. The company's $42 unit product is computer as follows: Direct materials $ 6 Direct labor 13 Variable manufacturing overhead 5 18 Fix manufacturing overhead ($360,000/20,000 units) Absorption costing unit product cost $42 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 operations are: Year 1 Year 2 Units produced 20,000 20,000 Units Sold 15,000 25,000 What is the variable costing net operations income in year 1 and year 2? Reconcile the absorption costing and the variable costing net operating income figures for each year. w