The contribution margin approach to the income statement:
A) organizes costs on a functional basis.
B) is useful to managers in planning and decision making.
C) shows a contribution margin rather than a net income figure at the bottom of the statement.
D) can be used only by manufacturing companies.

Question

Quizplus · Accepted Answer

The contribution margin approach is useful to managers for planning and decision making as it highlights the contribution of each product to covering fixed costs and generating profit.

The Contribution Margin Approach to the Income Statement