An Advantage of the Single-Step Income Statement Over the Multistep

question 46

Multiple Choice

An advantage of the single-step income statement over the multistep form is

• A)the amount of information it provides.
• B)its simplicity.
• C)its comprehensiveness.
• D)its use in computing ratios.

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Definitions:

Direct Manufacturing Cost

Expenses directly related to the production of goods, including labor and materials.

Incremental Manufacturing Cost

The extra expense associated with manufacturing an additional unit of a product.

Contribution Margin

The amount remaining from sales revenue after variable expenses are subtracted, contributing towards covering fixed costs and profit.

Variable Selling Expenses

Costs that fluctuate with the level of sales, such as commissions or shipping fees.