The traditional income statement is considered by most companies to be a better management tool than the contribution margin income statement.

Question

Quizplus · Accepted Answer

This statement is false. The contribution margin income statement is often considered a better management tool because it shows the contribution margin (sales revenue minus variable costs) for each product or service, providing insight into the profitability of different aspects of the business. The traditional income statement does not provide this level of detail.

The Traditional Income Statement Is Considered by Most Companies to Be