The CVP income statement classifies costs
A) as variable or fixed and computes contribution margin.
B) by function and computes a contribution margin.
C) as variable or fixed and computes gross margin.
D) by function and computes a gross margin.

Question

Quizplus · Accepted Answer

CVP income statement separates costs into variable or fixed categories and computes contribution margin, which is the sales revenue less variable costs. The statement does not classify costs by function, nor does it compute gross margin.

The CVP Income Statement Classifies Costs