Which one of the following statements is INCORRECT about the distinctions between Absorption Costing $($AC$)$ and Marginal Costing $($MC$)?$

A$.$

In AC$,$ selling and administrative expenses are treated as product costs along with variable costs.

B$.$

MC typically reports higher profits than AC when inventory levels decrease.

C$.$

AC includes all fixed manufacturing overheads in the cost of production, whereas MC does not.

D$.$

Under MC$,$ profits may fluctuate with changes in inventory levels, even if sales remain constant.