The Contribution Income Statement Differs from the Traditional Income Statement

question 105

Multiple Choice

The contribution income statement differs from the traditional income statement in which of the following ways?

• A) The traditional income statement separates costs into fixed and variable components.
• B) The traditional income statement subtracts all variable costs from sales to obtain the contribution margin.
• C) Cost-volume-profit relationships can be analyzed more easily from the contribution income statement.
• D) The effect of sales volume changes on profit is readily apparent on the traditional income statement.
• E) The contribution income statement separates costs into product and period categories.