An Income Statement Presented in a Functional Format Is Not

question 180

Multiple Choice

An income statement presented in a functional format is not very helpful in managerial decision making because

• A)It does not show which expenses are fixed and which are variable.
• B)It does not show which expenses are direct and which are indirect.
• C)It does not show which expenses are product costs and which are period costs.
• D)It does not show which expenses are common and which are allocated.

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Definitions:

Product Layout

An arrangement of machinery, equipment, and staff within a production facility where the workstations and equipment are ordered by the sequence of operations.

Basic Types

Fundamental categories or classifications within a broader system or concept.

Locations

Specific places or positions where businesses or activities are situated or conducted.

Businesses

Organizations engaged in commercial, industrial, or professional activities aimed at generating profits.