c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Check all that apply. Under variable costing, the units that were produced but unsold include fixed factory overhead cost, which is not included in cost of goods sold. Under absorption costing, when inventory increases, the income statement will have a higher Operating income than will the variable costing income statement. Under absorption costing, when inventory increases, the income statement will have a lower Operating income than will the variable costing income statement. Under variable costing, all of the fixed factory overhead cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. There is no difference; the Operating income reported in (a) and (b) is the same