A variable costing income statement is used for ________.
A) filing income tax returns
B) external reporting purposes
C) determining the amount of gross profit
D) internal decision-making purposes

Question

Quizplus · Accepted Answer

Variable costing income statements are used for internal decision-making purposes to determine the profitability of products and to determine the impact of changes in volume, costs, and prices on profits. They focus on the behavior of costs and separate fixed and variable costs, making it easier to analyze the profitability of individual products or services. They are not used for filing income tax returns or external reporting purposes, and while they do calculate gross profit, their primary purpose is for internal decision-making.

A Variable Costing Income Statement Is Used for ________