Which of the following would be a line item for a variable costing income statement?
A) Gross margin
B) Cost of goods available for sale
C) Total cost of goods sold
D) Contribution margin
E) Work-in-process inventory

Question

Quizplus · Accepted Answer

Contribution margin is a line item in a variable costing income statement as it deducts only variable costs from sales revenue to arrive at the contribution margin. Other options such as gross margin and total cost of goods sold may appear in a traditional income statement, but not necessarily in a variable costing income statement. Options B and E are related to inventory and not directly related to income statement line items.

Which of the Following Would Be a Line Item for a Variable