When variable costing is used, an income statement will show contribution margin.

Name: When variable costing is used, an income statement will show contribution margin.
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Question

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With variable costing, only variable manufacturing costs are included in the product cost, and fixed manufacturing costs are treated as period expenses. As a result, the income statement shows contribution margin (sales revenue minus variable expenses) instead of gross profit (sales revenue minus cost of goods sold).

When Variable Costing Is Used, an Income Statement Will Show