During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows Year 1 Year 2 Sales (e $61 per unit) Cost of goods sold ( $37 per unit) Gross marqin Selling and administrative expenses Net operating income $ 1,159,000 1,769,000 1,073,000 696,000 310,000340000 703,000 456,000 1U73000_ 146,000356,000 *$3 per unit variable; $253,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($360,00024,000 units) Absorption costing unit product cost 9 15 S 37 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: Units produced Units sold Year 1 Year 2 24,000 24, 000 19,000 29,000 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