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 $1,900. The bicycles sell for $2,650 each. Budgeted fixed manufacturing overhead for the most recent year was $11,900,000 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 22 , 900 units Sales 26,800 units 2 . Production 12 , 400 units Sales 12,400 units 3 . Production 12 , 350 units Sales 10,250 units