(1) (2) The contribution format of the income statement: organizes costs by function (i.e. selling expenses, administrative expenses) (b) organizes costs by behavior (fixed and variable) and is useful to managers in planning and decision making shows a contribution margin rather than a net income figure at the very bottom of the statement (d) can be used only by manufacturing companies Once the break-even point is reached: (a) the total contribution margin changes from negative to positive (b) net income will increase by the unit contribution margin for each additional item sold (c) variable expenses will remain constant in total the contribution margin ratio begins to decrease The amount by which a company's sales can decline before losses are incurred is called the: (a) contribution margin ratio (b) degree of operating leverage (c) margin of safety (d) contribution margin ratio The difference between total sales in dollars and total variable expenses is called: net operating income (b) net profit the gross margin (d) the contribution margin (3) (4)