Which of the following items appears on a variable costing income statement but not on a full costing income statement?
A)Sales
B)Gross margin
C)Net income
D)Contribution margin

Question

Quizplus · Accepted Answer

Contribution margin appears on a variable costing income statement as it represents the amount of revenue that is left over after variable costs have been deducted. Under full costing method, fixed manufacturing overhead costs are also included in the calculation of the cost of goods sold, which means gross margin and net income are affected by changes in inventory levels and are therefore not exclusive to a specific type of income statement. Sales will appear on both variable and full costing income statements.

Which of the Following Items Appears on a Variable Costing