Final answer:
Fixed costs are included on a traditional income statement but not on a contribution income statement. The correct option is: b) Fixed costs.
Step-by-step explanation:
On a traditional income statement, fixed costs and variable costs are included. Fixed costs are expenses that remain constant regardless of the level of production or sales, such as rent or salaries. Variable costs, on the other hand, change depending on the level of production or sales, such as raw materials or sales commissions.
Operating income, which is the result of subtracting all expenses from revenues, is also included on a traditional income statement. This represents the profit or loss generated from the core operations of a business.
However, a contribution income statement only considers variable costs and revenue. Fixed costs are not included, as the focus is on determining the contribution margin, which is the difference between sales revenue and variable costs.
The correct answer is Fixed costs (b).