The Contribution Approach to the Income Statement Offers Several Benefits

question 89

Multiple Choice

The contribution approach to the income statement offers several benefits to decision makers.Which of the following is NOT a benefit of this approach?

• A) This approach makes it easier to understand the impact of changes in sales volume on operating income.
• B) This approach stresses the role of fixed costs in operating income.
• C) This approach is used with CVP analysis.
• D) This approach is accepted by U.S. Generally Accepted Accounting Principles.

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Definitions:

Cultures

the shared values, traditions, norms, customs, arts, history, and institutions of a group of people.

Routine Decisions

Decisions that are made regularly and are often automated or based on established guidelines or procedures.

Organizational Politics

The use of power and social networking within an organization to achieve changes that benefit the individual or group, often at the expense of others.

Inoculation Effect

The inoculation effect is a social psychological and communication theory that explains how an initial exposure to a weakened form of an argument makes individuals more resistant to later attempts to change their attitudes or beliefs.