Which of the following is generally true for the cost of goods sold amount that a merchandising company would report on its income statement?
A) It is a mixed cost.
B) It is a variable cost.
C) It is a fixed cost.
D) It has no effect on the contribution margin.

Question

Quizplus · Accepted Answer

Cost of goods sold is typically a variable cost because it is directly related to the level of sales. As a company sells more merchandise, its cost of goods sold will increase proportionally. The other options are not typically true for cost of goods sold.

Which of the Following Is Generally True for the Cost