On an Income Statement Prepared with a Direct Costing Approach

question 97

Multiple Choice

On an income statement prepared with a direct costing approach, the excess of sales over the cost of goods sold, based on variable costs only, is referred to as

• A)the manufacturing margin.
• B)the marginal gross profit on sales.
• C)the marginal income on sales.
• D)the contribution margin.

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Definitions:

Individual Understanding

The unique way in which a person comprehends, interprets, and makes sense of the world and themselves.

Oppression

A system of power and domination that advantages some groups at the expense of others, limiting freedoms and opportunities.

Corrective Action

Measures taken to rectify problems, defects, or deviations from a set standard or expectation in processes, procedures, or behaviors.

Dysfunctional Behavior

Actions or behaviors that are ineffective for the individual and often harmful, which can interfere with everyday life and relationships.