Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, LO6-3] During Heaton Company's first two years of operations, the company reported absorption costing net operating inoome as follows: Sales (@ $62 per unit) Cost of goods sold (e $40 per unit) $ 992,000 $1,612,000 640,000 1,040,000 Gross margin Selling and administrative expenses 352,000 572.000 303,000 000 Net operating income $ 49,000 239,000 $3 per unit vanable: $255,000 fxed each year. The company's$40 unit product cost computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($367,000+21,000 units) 17 13 Absorption costing unit product cos S 40 Forty percent of fixed manufacturing overhead oonsists of wages and salaries; the remainder consists of depreciaton charges on production equipment and buildings Production and cost data for the two years are: Units produced Units sold 21,00021,000 6000 26,000 1. Prepare a variable costing conesbution format income statement for each year Variable Costing Income Statement A: : 0 888 FA esc F6 FT F2 2 4 6