An income statement is prepared as an internal report.Under which of the following methods would the term contribution margin appear?
Absorption costing Variable costing

Question

Quizplus · Accepted Answer

The term "contribution margin" appears in income statements prepared under the variable costing method, not under absorption costing. Variable costing separates fixed and variable costs, allowing for the calculation of the contribution margin, which is sales revenue minus variable costs.

An Income Statement Is Prepared as an Internal Report