Walsh Company manufactures and sells one product. The following information pertains to each of the company$$s first two years of operations:

Variable costs per unit:

Manufacturing:

Direct materials $ $26$

Direct labor $ $15$

Variable manufacturing overhead $ $5$

Variable selling and administrative $ $4$

Fixed costs per year:

Fixed manufacturing overhead $ $240,000$

Fixed selling and administrative expenses $ $100,000$

During its first year of operations, Walsh produced $50,000$ units and sold $40,000$ units. During its second year of operations, it produced $40,000$ units and sold $50,000$ units. The selling price of the company$$s product is $$56$ per unit.

$3.$ Reconcile the difference between variable costing and absorption costing net operating income in Year $1.$