Which of the following assumptions is implicit in the simplified contribution approach income statement?
A) There are two cost drivers, both units of production and units of sales.
B) The fixed expenses do vary with either units of production or units of sales.
C) Units of production and units of sales are equal.
D) Inventory levels in units do change.

Question

Quizplus · Accepted Answer

The simplified contribution approach income statement assumes that all units produced are sold, implying that units of production and units of sales are equal. This approach does not account for changes in inventory levels, making option C the correct assumption.

Which of the Following Assumptions Is Implicit in the Simplified