Which of the following statements is true of contribution-margin format of the income statement?
A) It is used for absorption costing.
B) It distinguishes between variable and fixed costs in its format.
C) It distinguishes manufacturing costs from nonmanufacturing costs.
D) It calculates gross margin.

Question

Quizplus · Accepted Answer

The contribution-margin format of the income statement distinguishes between variable and fixed costs in its format. It does not distinguish between manufacturing costs and nonmanufacturing costs, nor does it calculate gross margin. It is commonly used for variable costing rather than absorption costing.

Which of the Following Statements Is True of Contribution-Margin Format