1. What is the difference between absorption costing and variable costing? 2. Distinguish between product costs and period costs. 3. What effect will applying variable costing have on the income statement and the balance sheet? 4. What are the advantages and disadvantages of using variable costing? 5. How is it possible, under absorption costing, to increase net income by simply producing more goods? 6. What is the difference between gross margin and manufacturing margin? 7. Why are there objections to using absorption costing when segment reports of profitability are being prepared? 8. What are common costs? 9. How is a contribution margin determined, and why is it important to management? 10. What are considered direct costs in segment analysis? 11. What is cost-volume-profit analysis