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.During Heaton Companys first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 1,159,000 $ 1,769,000 Cost of goods sold (@ $37 per unit) 703,000 1,073,000 Gross margin 456,000 696,000 Selling and administrative expenses* 311,000 341,000 Net operating income $ 145,000 $ 355,000 * $3 per unit variable; $254,000 fixed each year. The companys $37 unit product cost is computed as follows: Direct materials $ 9 Direct labor 12 Variable manufacturing overhead 4 Fixed manufacturing overhead ($288,000 24,000 units) 12 Absorption costing unit product cost $ 37 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 Required: 1.

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: $3 per unit variable; $254,000 fixed each year. The company's $37 unit product cost is computed as follows: Production and cost data for the first two years of operations are: 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