Previous DBLEM 6-19 Variable Costing Income Statement; Reconciliation L06-1, L06-2, L06-3 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $25 per unit) Cost of goods sold (@ $18 per unit) Gross margin Selling and administrative expenses Net operating income '$2 per unit variable: $130.000 fed each you, The company's $18 unit product cost is computed as follows: Year 1 Year 2 $1,000,000 $ 1.250,000 720.000 900,000 280,000 350,000 210,000 230.000 $ 70,000 $ 120,000 Page 286 $ 4 7 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($270,000 45.000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: S18 Year 1 Year 2 Units produced 45,000 45,000 Units sold 40,000 50,000 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