Which of the Following Best Describes the Contribution Approach to the Income

question 67

Multiple Choice

Which of the following best describes the contribution approach to the income statement?

• A) It organizes costs on a functional basis.
• B) It is useful to managers in planning and decision making.
• C) It shows a contribution margin rather than an operating income figure at the bottom of the statement.
• D) It can be used only by manufacturing companies.

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Definitions:

Awarding Pay Increases

The process of granting employees a raise in their salary or wage, typically in recognition of their performance, inflation adjustment, or promotion.

Job-Based Pay Structures

Compensation frameworks that determine an employee's salary based on the specific job role rather than individual performance or characteristics.

Promotions

The advancement of an employee to a higher position within an organization, typically accompanied by an increase in salary and responsibilities.

Lateral Career Moves

Involves moving to a different position within the same level of hierarchy within an organization, often to gain a broader range of experience or skills without necessarily obtaining a promotion.