Problem 7-19 Variable Costing Income Statement; Reconciliation (LO7-2, L07-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as folk Year 1 Year 2 Sales (@ $61 per unit) $ 1,098,000 $ 1,708,000 Cost of goods sold (@$40 per unit) 720,000 1,120,000 Gross margin 378,000 588,000 Selling and administrative expenses 300,000 330,000 Net operating income 78,000 $ 258,000 $3 per unit variable: $246,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,000 + 23,000 units) Absorption costing unit product cost $ 6 13 2 19 $ 40 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation production equipment and buildings. Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 23,000 23,000 18,000 28,000 Required: 1. Using variable costing, what is the unit product cost for both years? production equipment and buildings. Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 23,000 23,000 18,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product cost Preds Required 2 >