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 $31. The masks sell for $40. Budgeted fixed manufacturing overhead for the most recent year was $712,800. 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 99,000 units 97,400 units 2. Production 81,000 units Sales 87,200 units 3. Production 81,200 units Sales 81,200 units 1. 2. 3. Income Higher Under (Method) Amount of Difference