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 ( 560 per unit) cost of goods sold ( 534 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,080,000 612,000 468,000 304,000 5 164.000 Year 2 $ 1,680,000 952,000 728,000 334.000 $ 394,000 $3 per unit variable: $250,000 fixed each year. The company's $34 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($276,000 23,000 units) Absorption costing unit product cost $ 10 9 3 12 $ 34 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 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