Which of the Following Is Correct

question 39

Multiple Choice

Which of the following is correct?

• A)The contribution income statement provides a gross margin.
• B)The absorption income statement provides a contribution margin.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain unchanged regardless of the level of production or sales, such as rent, salaries, and insurance premiums.

Capital

Resources made and used by humans to produce goods and services, including buildings, machinery, and equipment.

Barriers to Entry

Obstacles that prevent new competitors from easily entering an industry or area of business.

Industry Structure

The characteristics that influence the nature of competition and pricing in a particular industry, including the number and size of firms, entry barriers, and product differentiation.