What is the cause of the difference between absorption costing net operating income and variable costing net operating income?
a. Absorption costing deducts all manufacturing costs from net operating income; variable costing deducts only prime costs.
b. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories; variable costing considers all fixed manufacturing costs to be period costs.
c. Absorption costing includes variable manufacturing costs in product costs; variable costing considers variable manufacturing costs to be period costs.
d. Absorption costing includes fixed administrative costs in product costs; variable costing considers fixed administrative costs to be period costs.