Cost of Goods Manufactured, using Variable Costing and Absorption Costing On March 31, the end of the first year of operations, Barnard Inc., manufactured 3,800 units and sold 3,300 units. The following income statement was prepared, based on the variable costing concept: b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. The income from operations under the variable costing concept be the same as the income from operations under the absorption costing concept when the inventories either increase or will be than the income from operations under the absorption costing concept. The reason is because the variable costing cont deduct the fixed costs in the period that they are incurred, regardless of changes in inventory balances