Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year $1,054,000 663,000 391, 000 302,000 Year 2 $1,674,000 1,053, 000 621, 000 332,000 Sales (8 $62 per unit) Cost of goods sold ( $39 per unit) Gross margin Selling and administrative expenses* $ NB9,000 Net operating income 289,000 $3 per unit variable; $251,000 fixed each year The company's $39 unit product cost is computed as follows: Direct materials Direct labor 11 Variable manufacturing overhead 2 Fixed manufacturing overhead ($374, 000 17 22,000 unita) $ 39 Absorption coating unit product cost Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: Year 1 Year 2 22,000 27,000 22,000 Units produced. Units sold 17,000 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 COSt $ 39 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation production equipment and buildings Production and cost data for the first two years of operations are Year 1 22,000 Year 2 Units produced Units sold 22,000 27,000 17,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2 What is the variable costing net operating income in 3. Reconcile the absorption costing and the variable costing net operating income figures for each year 1 and in Year 2? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 2 Year 1 Net operating income (loss)