The contribution-margin format of the income statement:
A)calculates gross margin.
B)is used with absorption costing.
C)is used with variable costing.
D)distinguishes between manufacturing and nonmanufacturing costs.

Question

Quizplus · Accepted Answer

The contribution-margin format of the income statement is used with variable costing, which means it distinguishes between variable and fixed costs instead of manufacturing and nonmanufacturing costs. It helps to show the contribution margin, which is the amount of revenue remaining after variable costs are deducted from sales.

The Contribution-Margin Format of the Income Statement