During the current year, XYZ Company increased its variable SG&A expenses while keeping fixed SG&A expenses the same. As a result, XYZ's:

1. Contribution margin and gross margin will be lower.
2. Contribution margin will be higher, while its gross margin will remain the same.
3. Operating income will be the same under both the financial accounting income statement and contribution income statement.
4. Inventory amounts booked under the financial accounting income statement will be lower than under the contribution income statement.