Reconcile the difference between the net income under variable costing and the net income under absorption costing. That is, show a calculation that explains what causes the difference in net income between the two approaches.

During 2022, Waterway Corp. produced 48,700 units and sold 34,090 for $14.00 per unit. Variable manufacturing costs were $7.00 per unit. Annual fixed manufacturing overhead was $102,270. Variable selling and administrative costs were $3.00 per unit sold, and fixed selling and administrative expenses were $19,200. (a) Reconcile the difference between the net income under variable costing and the net income under absorption costing. That is, show a calculation that explains what causes the difference in net income between the two approaches