When reviewing the income statements of a firm prepared under both absorption costing and variablecosting, which of the following observation would bemade?

A.

Ending finished goods will differ between the two methods due to the different handling of fixed production costs.

B.

Ending finished goods to be reported under the two methods will be equal.

C.

Gross margin will differ under both methods but operating income will be the same.

D.

Cost of goods sold will be the same under both methodshowever, operating income will differ.