Which of the following best describes the contribution approach to the income statement?
A) It organizes costs on a functional basis.
B) It shows data based on the cost behavior aspect of fixed and variable.
C) It shows a contribution margin rather than an operating income figure at the bottom of the statement.
D) It can be used only by manufacturing companies.

Question

Quizplus · Accepted Answer

The contribution approach focuses on analyzing costs based on their behavior as either fixed or variable, and how they contribute to the overall profitability of the company. This approach helps in identifying the break-even point and determining the most profitable products or services.

Which of the Following Best Describes the Contribution Approach to the Income