The Contribution Margin Format Income Statement

question 38

Multiple Choice

The contribution margin format income statement:

• A)results in a larger amount of operating income than the traditional income statement format.
• B)uses a behavior pattern classification for costs rather than a functional cost classification approach.
• C)is most frequently used for financial statement reporting purposes.
• D)emphasizes that all costs change in proportion to any change in revenues.

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Definitions:

Equilibrium Price

The market price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Price Controls

Government-imposed limits on the prices that can be charged for goods and services in a market.

Inequities

Unfair, avoidable differences in treatment or opportunities across individuals or groups.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given period.