Income ________ when there is zero beginning inventory and all inventory units produced are sold.

A) Will be lower under variable costing than absorption costing
B) Will be the same under both variable and absorption costing
C) Will be higher under variable costing than absorption costing
D) Will be higher than gross margin under variable costing
E) Will be lower than administrative costs under absorption costing

Variable Costing

An accounting approach that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed overheads.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.

Inventory Units

The individual items or products that are available for sale, in production, or in stock as part of a company's inventory.