Exercise 8-24 Difference in Operating Income under Absorption and Variable Costing (LO 8-1, 8-4) Bianca Bicycle Company manufactures mountain bikes with a variable cost of $2,600. The bicycles sell for $3,350 each Budgeted fixed manufacturing overhead for the most recent year was $12,600,000. Planned and actual production for the year were the same 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. (Round intermediate calculations to 2 decimal places.) 1. Production Sales 2. Production Sales 3. Production Sales 23, 680 units 28,200 units 13,800 units 13,800 units 13,400 units 10,500 units Amount of Difference Income Higher Under (Method) 1 Absorption costing 2 Same under both 3. Absorption costing