Generally speaking, net operating income under variable and absorption costing will:

A) always be equal.
B) never be equal.
C) be equal only when production and sales are equal.
D) be equal only when production exceeds sales.

Net operating income under variable and absorption costing will be equal only when production equals sales because under absorption costing, fixed manufacturing overhead is allocated to units produced, affecting the cost of goods sold and inventory levels. When production equals sales, there are no changes in inventory levels, so the treatment of fixed manufacturing overhead does not create a difference in net operating income between the two costing methods.