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 $35. The masks sell for $44. Budgeted fixed manufacturing overhead for the most recent year was $799,000. 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 94,000 units 92,000 units 2. Production 85,000 units Sales 91,600 units 3. Production 82,000 units Sales 82,000 units 1. Income Higher Under (Method) 2. 3. Amount of Difference