value: 20.00 points Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, L06-3] During Heaton Company's first two years of operations, the company reported absorption costing net operating income as follows Year 1 666,000 450,000 Year 2 Sales (@ $62 per unit) Cost of goods sold (@ $37 per unit) $1,116,000 1,736,000 1,036,000 Gross margin Selling and administrative expenses 700,000 337,000 307,000 Net operating income $ 143,000 363,000 $3 per unit variable; $253,000 fixed each year The company's $37 unit product cost is computed as follows: Direct materials Direct labor Vari 12 2 18 able manufacturing overhead Fixed manufacturing overhead ($414,000 23,000 units) Absorption costing unit product cost S 37