Manta Ray Company manufactures diving masks with a variable cost of $25. The masks sell for $34.

Budgeted fixed manufacturing overhead for the most recent year was $792,000. Actual production was equal to planned production.

Required: Under each of the following conditions, state

(a) whether operating income is higher under variable or absorption costing and

(b) the amount of the difference in reported operating income under the two methods. Treat each condition as an independent case

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1. Production Sales........ 2. Production 110,000 units 108,000 units 90,000 units Sales.......... 95,000 units 3. Production Sales 79,200 units 79,200 units