On a traditional income statement, all costs related to the production or purchases stage of the value chain that are associated with units sold, are listed
A) above the contribution margin line.
B) above the gross profit line.
C) below the operating income line.
D) above the sales line.

Question

Quizplus · Accepted Answer

The gross profit line represents the revenue generated from sales minus the cost of goods sold. All costs related to the production or purchases stage of the value chain that are associated with units sold, including direct materials, direct labor, and manufacturing overhead, are included in the cost of goods sold. Therefore, these costs are listed above the gross profit line on a traditional income statement.

On a Traditional Income Statement, All Costs Related to the Production