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An income statement in the contribution margin format has Fewer costs than the traditional income statement (no period costs). The same costs as the GAAP
An income statement in the contribution margin format has Fewer costs than the traditional income statement (no period costs). The same costs as the GAAP income statement but listed by behavior. The same costs as the GAAP income statement but listed by function. The information to enable management to see gross profit percentages as an indicator of profitability. A cost that is considered to be a "mixed cost" Is partly variable and partly fixed. Is partly a production and partly a selling expense. Is partly a production and partly an administrative expense. Does not change with the level of activity. Companies attempt to operate as close to capacity as possible because Variable costs per unit decrease with increased production. Fixed costs per unit decrease with increased production. Variable costs per unit increase with increased production. Fixed costs per unit increase with increased production. The break-even point is Where revenue equals variable costs. Where revenue equals fixed costs. Where revenue equals fixed and variable costs. Where revenue equals contribution margin The importance of contribution margin is that it tells the user: How much of each sales dollar can be used to cover fixed expenses. The net profit percentage of the company. The gross profit percentage of the company. The net income of the firm. When pricing a product, managers should consider Only variable costs of production. Only variable and fixed costs of production. All variable and fixed costs including selling and administrative expenses. The contribution margin per unit. Once the breakeven point has been reached, operating income increases by the: Gross margin per unit for each additional unit sold. Contribution margin per unit for each additional unit sold. Variable costs per unit for each additional unit sold. Sales price per unit for each additional unit sold
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