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Choose from the following list the ones that are advantages of absorption costing and the ones that are advantages of variable costing.

This method is consistent with cost$-$volume$-$profit and incremental analysis.

Net income calculated is affected by changes in production levels under this method.

Net income calculated under this method is greatly affected by changes in sales levels $($not

production levels$).$

It is much easier to understand the impact of fixed and variable costs on the calculation of net

income.

Since there is an allocation of fixed costs to inventory, it is difficult to evaluate the impact of fixed

costs on the company's results.

When production exceeds sales, this method reports a higher net income.

GAAP requires companies to use this method for the costing of inventory.

Under this method, the fixed manufacturing overhead is charged as an expense in the current

period.

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