If a company's income is positive and fixed costs exist, which of the following items will increase or decrease at a greater rate than the change in the amount of sales on a variable costing income statement?
A)Variable costs
B)Fixed costs
C)Contribution margin
D)Net income

Question

Quizplus · Accepted Answer

Net income will increase or decrease at a greater rate than the change in the amount of sales on a variable costing income statement because fixed costs remain constant and do not change with the level of sales, affecting the net income more significantly.

If a Company's Income Is Positive and Fixed Costs Exist