Question: If a company uses variable costing and has higher ending inventory than beginning inventory, how will the reported net income under variable costing compare to

If a company uses variable costing and has higher ending inventory than beginning inventory, how will the reported net income under variable costing compare to net income under absorption costing?

Variable costing net income will be higher

Both will be the same

Absorption costing net income will exclude fixed costs

Variable costing net income will be lower

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