An income statement presented in a functional format is not very helpful in managerial decision-making because it does not show which expenses are
A)fixed and which are variable.
B)direct and which are indirect.
C)product costs and which are period costs.
D)common and which are allocated.

Question

Quizplus · Accepted Answer

A functional format income statement groups expenses by function (such as cost of goods sold, selling, general and administrative), but it does not break down expenses by whether they are fixed or variable, which is important information for managerial decision-making.

An Income Statement Presented in a Functional Format Is Not