X $8-24($Algo$)$ 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 $$2,600.$ The cost per unit remained the same in the current year as in the previous year. The bicycles sell for $$3,350$ each. Budgeted fixed manufacturing overhead for the year is $$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.

Note: Round intermediate calculations to $2$ decimal places.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.

Note: Round intermediate calculations to $2$ decimal places.