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During Heaton Company's first two years of operations, it reported absorption costing net operating income...

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales ($60 per unit) Cost of goods Hold ($38 per unit) Gross margin Selling and administrative expenses Net operating income Yaar 1 Year 2 $ 1,020,000 $1,620,000 646,000 1,026,000 374,000 594,000 298,000 328,000 $ 76,000 $ 266,000 *$3 per unit variable: $247,000 fixed each year, The company's $38 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing over head Fixed manufacturing overhead ($374,000 + 22,000 units) Absorption coating unit product cost $ 7 11 3 17 $ 38 Production and cost data for the first two years of operations are: Units produced Units hold 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year

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