Consider the following comments about absorption- and variable-costing income statements: I.A variable-costing income statement discloses a ﬁrm's gross margin. II.Cost of goods sold on an absorption-costing income statement includes ﬁxed costs. III.The amount of variable selling and administrative cost is the same on absorption- and variable-costing income statements. Which of the above statements is (are) true?
A)I only.
B)II only.
C)I and II.
D)II and III.
E)I, II, and III.

Question

Quizplus · Accepted Answer

A variable-costing income statement does not disclose gross margin, but contribution margin. Absorption costing includes fixed costs in COGS. Variable selling and administrative costs are the same in both methods.

Consider the Following Comments About Absorption- and Variable-Costing Income Statements