Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation (L0,6-1, LO6-2, L06-3] During Heaton 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 $ 1,854,000 646, eee 408,00 300,eee $ 108,000 Year 2 $ 1,674,000 1,026, eee 648,000 330, eee $ 318,080 $3 per unit variable: $249,000 fixed each year. The company's $38 unit product cost is computed as follows: $ 9 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($374,880 = 22,eee units) Absorption costing unit product cost 9 3 17 $ 38 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 22,800 17, eee Year 2 22,000 27, eee 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