es During Heaton Company's first two years of operations, It reported absorption costing net operating Income as follow Sales (@ $61 per unit) Cost of goods sold (@ $32 per unit) Year 1 $ 1,098,000 Year 2 $ 1,708,000 576,000 896,000 Gross margin 522,000 812,000 Selling and administrative expenses* 307,000 337,000 Net operating income $ 215,000 $ 475,000 $3 per unit variable; $253,000 fixed each year. The company's $32 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($299,000 = 23,000 units) Absorption costing unit product cost 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 $ 19 793 13 $ 32 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. 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 Costing and Absorption Costing Net Operating Incomes Variable costing net operating income (loss) Absorption costing net onerating income Year 1 Year 2