Allpro clubs is a startup company that manufactures golf clubs. The owner of the company is upset because allpro has reported losses for the last three quarters, despite increased productio and acquisition of new customers. The owner is worried about his ability to obtain additional financing. In reciewing the operating performance of allpro, you notice that the company's income statement has been prepared using variable costing. You know that although the company is not required to use GAAP, the absorption costing method maybe a better method for Allpro to use for financial reporting purposes. As the senior accountant, draft a memo to the owner explaining the differences between variable and absorption costing and how a change in methodology could impact the company's profitability.