Problem $6-19($Algo$)$ Variable Costing Income Statement; Reconciliation $[$LO$,6-1,$ LO$6-2,$ LO$6-3]$

During Heaton Company$$s first two years of operations, it reported absorption costing net operating income as follows:

$$Year $1$Year $2$Sales $($@ $$62$ per unit$)$$ $992,000$$ $1,612,000$Cost of goods sold $($@ $$38$ per unit$)608,000988,000$Gross margin$384,000624,000$Selling and administrative expenses$*299,000329,000$Net operating income$ $85,000$$ $295,000$

$*$ $$3$ per unit variable; $$251,000$ fixed each year.

The company$$s $$38$ unit product cost is computed as follows:

Direct materials$ $9$Direct labor$12$Variable manufacturing overhead$4$Fixed manufacturing overhead $($$$273,00021,000$ units$)13$Absorption costing unit product cost$ $38$

Production and cost data for the first two years of operations are:

$$Year $1$Year $2$Units produced$21,00021,000$Units sold$16,00026,000$

Required:

Using variable costing, what is the unit product cost for both years?

What is the variable costing net operating income in Year $1$ and in Year $2?$

Reconcile the absorption costing and the variable costing net operating income figures for each year.