Although the traditional format income statement is useful for external reporting purposes, it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs. True False Question 2 (1 point) A contribution format income statement separates costs into fixed and variable categories, first deducting variable expenses from sales to obtain the contribution margin. True False Question 3 (1 point) The cost of napkins put on each person's tray at a fast food restaurant is a variable cost with respect to how many persons are served. True False Question 4 (1 point) Fixed costs expressed on a per unit basis do not change with changes in activity. True False Question 5 (1 point) Indirect costs, such as manufacturing overhead, are always variable costs. True