A direct-costing income statement has a subtotal for ________ whereas an absorption-costing income statement has a subtotal for ________.
A) gross profit; contribution margin
B) contribution margin; gross profit
C) cost of goods sold; variable cost of goods sold
D) cost of goods manufactured; variable cost of goods manufactured

Question

Quizplus · Accepted Answer

A direct-costing income statement, also known as variable costing, includes a subtotal for contribution margin, which is sales revenue minus variable costs. An absorption-costing income statement includes a subtotal for gross profit, which is sales revenue minus cost of goods sold, where cost of goods sold includes both variable and fixed manufacturing costs.

A Direct-Costing Income Statement Has a Subtotal for ________ Whereas