Variable and Absorption Costing The following data were adapted from a recent income statement of Ansara Company for the year ended December 31 : Assume that $5,100 million of cost of goods sold and $1,160 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and en of the year were as follows: Also, assume that 40% of the beginning and ending inventories were fixed costs: a. Prepare an income statement according to the variable costing concept for Ansara Company. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing conceptsi The income from operations under the variable costing concept be the same as the income from operations under the absorption costing concept when the inventories either increase or decrease during the year. In this case, Ansara's inventory , meaning it sold than it produced. As a result, the income from operations under the variable costing concept will be than the income from operations under the absorption costing concept. The reason is because the variable costing concept deduct the fixed costs in the period that they are incurred, regardless of changes in inventory balances