Question

A​ ________ groups cost by​ behavior; costs are classified as either variable costs or fixed costs. A. contribution margin income statement B. balance sheet C. absorption costing income statement D. traditional income statement

Answer 1

A. contribution margin income statement.

Step-by-step explanation:

This is explained as a tool used critically used in planning and also decision making; it also proves itself to be a pattern or array of showing cost and expenses towards a particular fixed cost or profits. It is been shown to be contribution margin per unit, ratio or contribution margin. Therefore when sales double in cases like this, variable cost is said to do the same too.

It is also said to be different from normal income statement in many different ways which could include:

1). Variable selling are be grouped as product costs.

2). Contribution margin comes to place instead of placing it as gross margin etc.