When Production Exceeds Sales and the Company Uses the LIFO

Multiple Choice

When production exceeds sales and the company uses the LIFO inventory flow assumption, the net operating income reported under absorption costing generally will be:

A) less than net operating income reported under variable costing.
B) greater than net operating income reported under variable costing.
C) equal to net operating income reported under variable costing.
D) higher or lower because no generalization can be made.