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Which one of the following statements is INCORRECT about the distinctions between Absorption Costing (AC)...

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Accounting

Which one of the following statements is INCORRECT about the distinctions between Absorption Costing (AC) and Marginal Costing (MC)?
A.
In AC, selling and administrative expenses are treated as product costs along with variable costs.
B.
MC typically reports higher profits than AC when inventory levels decrease.
C.
AC includes all fixed manufacturing overheads in the cost of production, whereas MC does not.
D.
Under MC, profits may fluctuate with changes in inventory levels, even if sales remain constant.

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