Exercise 8-20 Difference in Operating Income under Absorption and Variable Costing (LO 8-1, 8-4) Manta Ray Company manufactures diving masks with a variable cost of $34. The masks sell for $43. Budgeted fixed manufacturing overhead for the most recent year was $781,200. Actual production was equal to planned production. Required: State whether operating income is higher under variable or absorption costing and the amount of the difference in reported operating income under the two methods. Treat each condition as an independent case. (Do not round intermediate calculations.) 1. Production Sales 97,650 units 95,750 units 2. Production 84,000 units Sales 90,500 units 3. Production 81,800 units Sales 81,800 units 1. - 23 Income Higher Under (Method) Amount of Difference