The CVP Income Statement Classifies Costs

question 10

Multiple Choice

The CVP income statement classifies costs

• A) as variable or fixed and computes contribution margin.
• B) by function and computes a contribution margin.
• C) as variable or fixed and computes gross margin.
• D) by function and computes a gross margin.

---

Definitions:

Noninterest-Bearing Note

A promissory note that does not accrue interest over its lifetime, meaning the borrower repays only the principal amount.

Current Interest Rates

Current interest rates are the rates at which interest is paid by borrowers for the use of money that they borrow from lenders.

Notes Receivable Dishonored

A note that was not paid by the maker at its due date, considered a defaulted payment.

Protest Fee

A fee charged for formally declaring a party's disagreement or refusal to accept a financial obligation or document, often relating to banking instruments like checks.