In an income statement prepared as an internal report using the variable costing method,fixed manufacturing overhead would
A)not be used.
B)be used in the computation of operating income but not in the computation of the contribution margin.
C)be used in the computation of the contribution margin.
D)be treated the same as variable manufacturing overhead.

Question

Quizplus · Accepted Answer

In variable costing, fixed manufacturing overhead is not included in the computation of the contribution margin but is deducted from the contribution margin to compute operating income.

In an Income Statement Prepared as an Internal Report Using