During heaton company’s first two years of operations, it reported absorption costing net operating income as follows: year 1 year 2 sales (@ $25 per unit) $ 1,000,000 $ 1,250,000 cost of goods sold (@ $18 per unit) 720,000 900,000 gross margin 280,000 350,000 selling and administrative expenses* 210,000 230,000 net operating income $ 70,000 $ 120,000 *$2 per unit variable; $130,000 fixed each year. the company’s $18 unit product cost is computed as follows: direct materials $ 4 direct labor 7 variable manufacturing overhead 1 fixed manufacturing overhead ($270,000 ÷ 45,000 units) 6 absorption costing unit product cost $ 18 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 units produced 45,000 45,000 units sold 40,000 50,000 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. garrison 16e rechecks 2017-09-25, 2018-09-27 next visit question mapquestion 5 of 7 total5 of 7 pr