In our analysis of cost of goods sold and net income at Muesli AG$,$ we discovered that reported costs and income differed depending on whether Muesli AG used variable

costing or absorption costing. We know that absorption costing is required by GAAP for financial statements, but managers have a choice of reports to use to help them

manage the business.

You have been asked to recommend either variable costing or absorption costing to Muesli AG managers in their analysis of profitability from month to month. What

would make you recommend variable costing over absorption costing?

Check All That Apply

Muesli AG produces the same total quantity of muesli each month.

Muesli AG produces the same product mix each month.

Muesli AG produces different flavors and sizes of muesli each month.

Muesli AG produces the same quantity of muesli that it sells each month.

There is little to no finished goods inventory at the end of each month at Muesli AG

A large proportion of production costs at Muesli AG are fixed.

Muesli AG produces a different total quantity of muesli each month.

Muesli AG sells the same number of boxes of muesli each month.