Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [L0,6-1, LOG-2, L06-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $68 per unit) $ 1,828,888 $ 1,628,888 Cost of goods sold (@ $38 per unit) 518,888 818,888 Gross margin 518,888 818,888 Selling and administrative expenses* 299,888 329,888 Net operating income $ 211,888 $ 481,888 * $3 per unit variable; $248,000 fixed each year. The company's $30 unit product cost is computed as follows: Direct materials $ 6 Direct labor 8 Variable manufacturing overhead 2 Fixed manufacturing overhead ($388,888 + 22,888 units) 14 Absorption costing unit product cost $ 39 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 22,888 22,888 Units sold 17,888 2?,888 Required: 1. Using variable costing, what is the unit product cost for both yea rs? 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 H Required 2 Required 3 Using variable costing, what is the unit product cost for both years? \fRequired 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) $ 61,000 $ 461,000 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income