Select the Incorrect Statement Regarding the Contribution Margin Income Statement

question 116

Multiple Choice

Select the incorrect statement regarding the contribution margin income statement.

• A) The contribution margin approach for the income statement is unacceptable for external reporting.
• B) Contribution margin represents the amount available to cover product costs and thereafter to provide profit.
• C) The contribution margin approach requires that all costs be classified as fixed or variable.
• D) Assuming no change in fixed costs, a $1 increase in contribution margin will result in a $1 increase in profit.

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