Exercise 8-24 Difference in Operating Income under Absorption and Variable Costing (LO 8-1, 8-4) Bianca Bicycle...

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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 $2,800. The bicycles sell for $3,550 each. Budgeted fixed manufacturing overhead for the most recent year was $12,800,000. 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 23,800 units 28,600 units 2. Production 14,200 units Sales 14,200 units 3. Production Sales 13,700 units 10,700 units 1. 2. 3. -23 Income Higher Under (Method) Amount of Difference 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 $2,800. The bicycles sell for $3,550 each. Budgeted fixed manufacturing overhead for the most recent year was $12,800,000. 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 23,800 units 28,600 units 2. Production 14,200 units Sales 14,200 units 3. Production Sales 13,700 units 10,700 units 1. 2. 3. -23 Income Higher Under (Method) Amount of Difference