Sparkle Toy Manufacturer Uses Absorption Costing for Its External Reports

Sparkle Toy Manufacturer uses absorption costing for its external reports and variable costing for its internal reports. The FIFO cost flow is used for both costing methods. Data concerning the firm's inventories appear below:
September October November
Absorption cost $10,436 $12,408 $22,430
Variable cost 8,320 9,892 17,882
a)Why is the value of inventory lower under variable costing than under absorption costing? Will this always be the case?
b)What is the relationship between absorption cost and variable cost operating income in November? Determine whether variable costing or absorption costing will show the higher operating income in November, and calculate the amount by which the operating incomes would differ.
c)If the company were to carry no finished goods inventories, then operating income would be the same under absorption and variable costing. Provide a business reason why companies typically do not carry zero finished goods inventories.