Bianca Bicycle Company manufactures mountain bikes with a variable cost of $2,000. The bicycles sell for $2,750 each. Budgeted fixed manufacturing overhead for the most recent year was $12,000,000. 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 23,000 units 27,000 units 12,600 units 12,600 units 12,500 units 10,300 units Income Higher Under (Method) Amount of Difference 1. 2 3