Which of the following is a characteristic of a contribution margin income statement?
A) Variable and fixed expenses are combined into total expenses.
B) When variable costs are less than sales revenue, there is a positive contribution margin.
C) The amount of gross margin is shown.
D) Contribution margin is identified as the difference between sales revenue and total expenses.

Question

Quizplus · Accepted Answer

The contribution margin income statement separates costs into variable and fixed categories, and the contribution margin is calculated as sales revenue minus variable costs. Therefore, when variable costs are less than sales revenue, the contribution margin is positive.

Which of the Following Is a Characteristic of a Contribution