Sales (@ $62 per unit) Cost of goods sold ( $33 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,054,000 561,000 493,000 300,000 $ \193,000 Year 2 $1,674,000 891,000 783,000 330,000 $ 453,000 *$3 per unit variable; $249,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($286,000 + 22,000 units) Absorption costing unit product cost Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operatons are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27,000 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