Chu Enterprise's Inventory Increased During the Year

Multiple Choice

Chu Enterprise's inventory increased during the year. On the basis of this information, income reported under absorption costing:

A) will be the same as that reported under variable costing.
B) will be higher than that reported under variable costing.
C) will be lower than that reported under variable costing.
D) will differ from that reported under variable costing, the direction of which cannot be determined from the information given.
E) will be less than that reported in the previous period.