Given the following three statements, which option is correct: Statement 1: The only difference between Absorption Costing and Variable costing is the treatment of fixed production costs and fixed sales costs Statement 2: All other factors being equal, under absorption costing an adjustment for a production volume variance will be negative whenever actual production exceeds budgeted production Statement 3: All other factors being equal, Absorption costing will show greater net income than variable costing when there is a large reduction in inventory during the year. A. All statements are true B. All statements are false C. Statements 1 and 2 and are true, and statement 3 is false D. Statement I is false, and statement 2 and 3 are true E. Statements 1 and 2 are false, and statement 3 is true