Which of the following statements is false regarding the contribution margin income statement?

Question

Quizplus · Accepted Answer

The contribution margin income statement does not include a subtotal called gross profit. Instead, it focuses on separating costs into variable and fixed categories, and the key subtotal it provides is the contribution margin, which is sales revenue minus variable costs. Gross profit is a term typically found in traditional income statements, where it is calculated as sales revenue minus cost of goods sold (COGS), without distinguishing between fixed and variable costs.

Which of the Following Statements Is False Regarding the Contribution