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 $25. The masks sell for $34. Budgeted xed manufacturing overhead for the most recent year was $873,600. 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 112,000 units Sales 109,400 units 2 . Production 96,000 units Sales 101,600 units 3 . Production 80,000 units Sales 80,000 units