Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,159,000 741,000 418,000 309,000 $ 189,080 Year 2 $ 1,769,000 1,131,800 638,000 339,000 $ 299,080 $3 per unit variable: $252,000 fixed each year, The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($456,000 + 24,000 units) Absorption costing unit product cost $ 8 11 1 19 $ 39 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 24,000 24,00 19,800 29,000 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, Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product on (Required Required 2 Required 1 required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 2 Net operating income (loss) Year 1 Required 1 Required 2 Frequired 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 Year 1 Variable costing net operating income (love) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Atmorption conting net operating income