Under the LIFO inventory flow assumption, if the number of units in inventories increase between the beginning and end of the period, absorption costing net operating income will generally be greater than variable costing net operating income.

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Under LIFO, the costs of the last units purchased or produced are matched with revenues to determine COGS, which results in higher COGS and lower ending inventory compared to FIFO. This means that under absorption costing, a larger portion of the fixed manufacturing overhead is allocated to COGS, resulting in higher net operating income compared to variable costing.

Under the LIFO Inventory Flow Assumption, If the Number of Units