Choice "C" is correct. The difference between variable and absorption costing is the manner in which fixed manufacturing costs are treated. Under variable costing, only variable costs are included in inventory. Consequently, the difference in net income under variable costing rather than absorption costing is the amount of fixed manufacturing costs (accounted for in inventory under absorption costing) multiplied by the change in inventory. An increase in inventory indicates that a portion of the fixed costs associated with inventory under absorption costing are expensed under variable costing. Absorption costing, therefore, produces greater income than variable costing as inventory levels increase as follows:

Choice "d" is incorrect. The difference between the fixed costs in inventory and the variable costs in inventory is not the difference in net income when comparing the two methods.
Choice "b" is incorrect. The change in inventory times the variable cost per unit does not define the difference in net income per above. Variable costs are included in inventory and, therefore, reduce cost of goods sold under both methods.
Choice "a" is incorrect. The change in inventory times total cost does not define the difference in net income. Inventory does receive a value under variable costing; however, it is limited to variable costs.