* $3 per unit variable; $254,000 fixed each year. The company's $42 unit product cost is computed as follows: Production and cost data for the first two years of operations are: \begin{tabular}{|c|c|c|} \hline & Year 1 & Year 2 \\ \hline Net operating income (loss) & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes } \\ \hline & Year 1 & Year 2 \\ \hline Variable costing net operating income (loss) & & \\ \hline Add(deduct)fixedmanufacturingoverheaddeferredin(releasedfrom)inventoryunderabsorptioncosting & & \\ \hline Absorption costing net operating income & & \\ \hline \end{tabular}