Which of the following items on a variable costing income statement will change in direct proportion to a change in sales?
A)Sales, contribution margin, and net income
B)Sales, variable costs, and contribution margin
C)Sales, variable costs, contribution margin, fixed costs, and net income
D)Sales, variable costs, and fixed costs

Question

Quizplus · Accepted Answer

In variable costing, variable costs are directly proportional to sales. As sales increase, variable costs will also increase proportionally, resulting in a change in contribution margin. Therefore, on a variable costing income statement, sales, variable costs, and contribution margin will change in direct proportion to a change in sales. Fixed costs, on the other hand, remain constant regardless of changes in sales volume, which means that net income will not change in a strictly proportional manner.

Which of the Following Items on a Variable Costing Income