Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,920,0e0 1,050,000 870,000 343,000 Sales (e $64 per unit) Cost of goods sold (e $35 per unit) Gross margin Selling and administrative expenses $ 1,280,000 700,0e0 580,0e9 313,000 $ 1267,00e 527,000 Net operating income $3 per unit variable; $253,000 fixed each year. he company's $35 unit product cost is computed as follows: $ 7 Direct materials Direct labor 12 1 Variable manufacturing overhead Fixed manufacturing overhead ($375,e00 + 25,000 units) 15 $ 35 Absorption costing unit product cost Required 2 Required 3 Required 1 What is the variable costing net operating income in Year 1 and in Year 27 (Loss amounts should be indicated with a minus sign.) Year 1 Year 2 Net operating income (loss) wwwwwrak Required Required 2 Required 1 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 Year 2 Variable costing net operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing net operating income