6 Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation (LO,6-1, LO6-2, L06-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: 2 points Sales (@ $63 per unit) Cost of goods sold (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,008,000 512,000 496,000 295,000 $ 201,000 Year 2 $ 1,638,000 832,000 806,000 325,000 $ 481,000 eBook *$3 per unit variable: $247,000 fixed each year. Print The company's $32 unit product cost is computed as follows: References Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($252,000 + 21,000 units) Absorption costing unit product cost $8 10 2 12 $ 32 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 21,000 16,000 Year 2 21,000 26,000 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 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 Year 2 Variable costing net operating income (loss) $ 201,000 $ 481,000 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under 60,000 absorption costing (60,000) Absorption costing net operating income $ 261,000 $ 421,000