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

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Accounting

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales ( $64 per unit) Cost of goods sold ($34 per unit) Gross margin Selling and administrative expenses $1,152,000 612,000 540,000 302,000 $1,792,000 952,000 840,000 332,000 Net operating incone 238,000 508,000 $3 per unit variable; $248,000 fixed each year. The company's $34 unit product cost is computed as follows Direct materials S 9 10 2 Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($299,000 23,000 units) 13 Absorption costing unit product cost $ 34 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 operations are Year 1 23,000 18,000 Year 2 23,000 28,000 Units produced Units sold 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. Comnlete this nuestion bv enterina vour answers in the tahs helow

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