For the following, state if absorption costing only, variable costing only or both

1. Treats fixed selling cost as a period cost.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 1
2. Required by generally accepted accounting principles.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 2
3. Treats fixed manufacturing cost as a period cost.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 3
4. Operating income is impacted by changes in inventory level.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 4
5. Generally provides the most useful report for controlling costs.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 5
6. Generally provides the most useful report for setting long-term prices.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 6
7. May be used in a manufacturing company.	SelectAbsorption costing onlyVariable costing onlyBoth absorption and variable costingItem 7
8. Includes gross profit on the income statement.