Sales ( $63 per unit) Cost of goods sold ($39 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,134,000 782, eee 432,000 301,eee $ 131, eee Year 2 $ 1,764,000 1, e92,000 672,080 331,000 $ 341,eee $3 per unit variable: $247.000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (5322, eee + 23,000 units) Absorption costing unit product cost $ 10 11 4 14 $ 39 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 date for the first two years of operatons are: Units produced Units sold Year 1 Year 2 23, ese 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