A Contribution Margin Format Income Statement

question 42

Multiple Choice

A contribution margin format income statement

• A)is based on cost function rather than on cost behavior.
• B)allows managers to assess the impact of sales volume on operating income.
• C)both is based on cost function rather than on cost behavior and allows managers to assess the impact of sales volume on operating income.
• D)neither is based on cost function rather than on cost behavior nor allows managers to assess the impact of sales volume on operating income.

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Definitions:

Labor

Utilizing human physical and mental prowess in the production and servicing of goods.

MRP

The marginal revenue product, which is the additional revenue generated from using one more unit of a factor of production.

Wage Rate

The amount of money paid to an employee per unit of time or for each unit of output produced.

Demand Schedule

A table or graph that shows the quantity of a good or service that consumers wish to buy at each price level.