Which of the following terms would be found on an income statement using variable costing but never not on an income statement prepared using absorption costing?
A)contribution margin
B)variable manufacturing overhead
C)fixed manufacturing overhead
D)gross profit

Question

Quizplus · Accepted Answer

Contribution margin is a term used in variable costing to calculate the amount of available income to cover fixed costs and generate profit. This term is not used in absorption costing, where fixed manufacturing overhead is included in the cost of goods sold and the operating expenses. The other options, B, C, and D, can be found in both income statements prepared with either variable or absorption costing.

Which of the Following Terms Would Be Found on an Income