Managerial accounting please help

During Heaton Company's first two years of operations, the company reported absorption costing net operating income as follows: Year 1 2 Year 1,260,000 1,890,000 Sales $63 per unit) Cost of goods sold $35 per unit) 700,000 1,050,000 840,000 560,000 Gross margin 312,000 342,000 Selling and administrative expenses Net operating income 248,000 498,000 The company's $35 unit product cost is computed as follows: Direct materials 10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($300,000 25,000 units) 12 Absorption costing unit product cost 35 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 two years are: Year 1 Year 2 Units produced 25,000 25,000 Units sold 20,000 30,000