During Heston Company's first two years of operations, it reported absorption costing net operating income as follows: Sales ($62 per unit) Cost of goods sold (@ $38 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,116,00 684,000 432,000 327.ee 125.000 Year 2 $ 1,736,00 1,864,000 672,00 337,000 $ 335,000 *$3 per unit variable: $253,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,62e : 23,800 units) Absorption costing unit product cost 1e 2 19 $38 Production and cost date for the first two years of operations are: Units produced Units sold Year 1 23,000 18,080 Year 2 23,20 28, ege 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year. Reconciliation of variable Coating and Absorption Costing Net Operating Incomes Year 1 Year 2 Variable costing net operating income (less) $ 48,000 (102,000) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing 95.000 Add: Fixed manufacturing overhead cost released from inventory under absorption costing 95.000 Absorption costing net operating income S 143.000 $ 7,000) S O