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 $1,500. The bicycles sell for $2.250 each. Budgeted fixed manufacturing overhead for the most recent year was $11,500,000. 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 22,500 units 26.000 units 11,600 units 11.600 units 11,750 units 10.050 unita Income Higher Under (Method) Amount of Difference 1 2