Answer (B) is correct . In a variable costing system, only the variable costs are recorded as product costs. All fixed costs are expensed in the period incurred. Because changes in the relationship between production levels and sales levels do not cause changes in the amount of fixed manufacturing cost expensed, profits more directly follow the trends in sales.
Answer (A) is incorrect because The cost of a unit of product changing owing to a change in the number of units manufactured is a characteristic of absorption costing systems.
Answer (C) is incorrect because Idle facility variation is a characteristic of absorption costing systems.
Answer (D) is incorrect because Neither variable nor absorption costing includes administrative costs in inventory.
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