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VICIIUIT (LU,0-1, LUO-4, LVO-SJ During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: nces Year 1 Year 2 Sales (e $62 per unit) $ 1,116,000 $ 1,736,000 Cost of goods sold { $32 per unit) 576,000 896,000 Gross margin 540,000 840,000 Selling and administrative expenses 309,000 339,000 Net operating income $ 231,000 $ 501,000 *$3 per unit variable; $255,000 fixed each year. The company's $32 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($250,000 - 23,000 units) Absorption costing unit product cout $ 32 Production and cost data for the first two years of operations are: Year 1 Year 2 Unita produced 23,000 23,000 Units sold 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be sign.) Year 1 Year 2 Net operating income (loss) dung Income figures for each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Requires 3 Reconcile the absorption costing and the variable costing net operating income figures for each year. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Your 2

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