Final answer:
An income statement organized by cost behavior includes revenues, variable costs, contribution margin, fixed costs, and operating income but does not include gross profit, which is found in a traditional income statement. Option b.
Step-by-step explanation:
An income statement organized by cost behavior typically includes the classification of costs as variable or fixed and is often associated with variable costing. When costs are categorized by behavior, the focus is on how costs change in relation to changes in the volume of production or sales. This type of income statement highlights contribution margin, which is the amount remaining from sales revenue after variable expenses have been deducted.
Here is what typically is included in an income statement organized by cost behavior:
- Revenues
- Variable Costs
- Contribution Margin
- Fixed Costs
- Operating Income
Based on this classification, the correct answer to the question is (b) Gross Profit. Gross profit is a term used in a traditional income statement, which is organized based on the nature of the costs (i.e., Cost of Goods Sold and Operating Expenses) rather than their behavior.