Chapter 6 The company's $18 unit product cost is computed as follows: Direct materials Direct labor.. Variable manufacturing overhead Fixed manufacturing overhead ($270,000 - 45,000 units). Absorption costing unit product cost. $ 4 7 1 6 $18 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder con- sists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold. 45,000 45,000 40,000 50,000 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. Chapter 6 The company's $18 unit product cost is computed as follows: Direct materials Direct labor.. Variable manufacturing overhead Fixed manufacturing overhead ($270,000 - 45,000 units). Absorption costing unit product cost. $ 4 7 1 6 $18 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder con- sists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold. 45,000 45,000 40,000 50,000 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