The Contribution-Margin Format of the Income Statement

question 179

Multiple Choice

The contribution-margin format of the income statement:

• A)is used with absorption costing
• B)highlights the lump sum of fixed manufacturing costs
• C)distinguishes manufacturing costs from nonmanufacturing costs
• D)calculates gross margin

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted, representing the average cost of funding from all sources.

Pure Play

A company that focuses on a specific industry or product segment without diversification into other areas.

Capital Structure

The combination of borrowing and ownership funds that a business employs to finance its activities and expansion.

Financing

The act of providing funds for business activities, making purchases or investing.