Exercise 8-20 Difference in Operating Income under Absorption and Variable Costing (L0 8-1, 8-4) Manta Ray Company manufactures diving masks with a variable cost of $23. The masks sell for $32. Budgeted fixed manufacturing overhead for the most recent year was $827,200. 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 163,466 units Sales 161,666 units 2. Production 94,666 units Sales 99,466 units 3. Production 79,666 units Sales 79,666 units