Which is the true statement?   The CVP income statement shows contribution margin instead of gross profit. In a CVP income statement, costs and expenses are classified only by function. In a traditional income statement, costs and expenses are classified as either variable or fixed. The CVP income statement is prepared for both internal and external use.

Q: RUE OR FALSE Net income under GAAP highlights differences between variable and fixed costs.

A: Answer:   Net income under GAAP highlights differences between variable and fixed costs.   The…

Q: Following GAAP, the income statement issued to in OA. be prepared in the contribution margin forma…

A: The three most important financial statements are enumerated as below:Income Statement Balance…

Q: The cost that is incurred in the process of generating the income will be called as O a. Expense O…

A: Expense is the amount of cost incurred during the period. Revenue is the total amount of receipts.…

Q: When we reduce Total expenses from Revenue , the result is called as ........... a. Cost b. Revenues…

A: Revenues is the total receipts of the business irrespective of the cost incurred. Expenses are the…

Q: A traditional income statement classifies costs by function; costs are classified as either product…

A: The question is related to Classification of cost. The traditional income statement classifies costs…

Q: The difference between contribution margin and income from operations is ________. a. net income b.…

A: The contribution margin is the excess revenue over the value of variable cost and the operating…

Q: As compared to a traditional income statement format, which of the following terms do not appear on…

A: Where in the traditional income statement, Expenses are categorized in two different categories…

Q: When Total Contribution magrin equals total fixed costs, this indicates operating income True…

A: If the contribution margin is equal to the total fixed cost that means it a situation of the…

Q: All of the following represents a cost-volume- profit relationship except: a. Total contribution…

A: Cost profit volume analysis relationship shows how the profit of a entity changes due to change in…

Q: A) Semi-variable or semi-fixed costs (Mixed costs). These costs include both a direct of indirect…

A: Managerial accounting is the accounting process followed by a business for their better management.…

Q: Which of the following is subtracted from Gross profit to arrive at Operating income

A: Introduction:- Operating income can be calculated by deducting the cost of goods sold and operating…

Q: How the system of cost accounting has overcome the limitations of financial accounting. Explain it…

A: Cost Accounting -: Cost accounting is a procedure of administrative accounting that aims to…

Q: Product costs are ordinarily found in the traditional Income Statement's Operating Expenses whereas…

A: Product costs are those costs which are incurred on specific products like material cost, labour…

Q: an accounting method that is used to predict profits. 2- ‏costing method that assigns overhead and…

A: Accounting can be defined as the process which helps to record, analyze, interpret, and reporting…

Q: Which of the following items would  not be found on a contribution format income statement?…

A: Cost-Volume-Profit analysis is the technique of managerial accounting, which examines that how…

Q: In your own words explain the meaning of: a. differential revenue, b. differential cost, and c.…

A: In accounting, Differential means the difference between the two alternatives or two output levels,…

Q: Which of the following is not a correct definition of the breakeven point? A.the point where total…

A: At Breakeven Point, Total Profits are equal to zero, Contribution Margin equal to Total Fixed…

Q: Which of the following is considered a fixed cost? a) rent expense b) marketing costs record…

A: The manufacturing company has undergone many costs. The process of the product will resulted in to…

Q: An example of an expense classifi cation by function is: C . cost of goods sold.

A: Expenses are either classified by nature or by function.

Q: 1. Multiple-Choice Question - FIFO When using FIFO, A) Identical costs go to the balance sheet and…

A: FIFO is one of the inventory valuation method being used in business. FIFO means first in first out.…

Q: Why do many operating managers prefer a contribution income statement instead of a traditional…

A: Traditional income statement: Traditional income statement is a financial statement that shows the…

Q: Gross margin is included on the income statement under which format(s)? A) B) C) D) Contribution…

A: Gross Margin is included on the income statement under traditional approach.  Gross Margin = Sales -…

Q: Which of the following statements is most correct about step costs?  they have the same behaviour…

A: Marginal costing is the one by which the cost of additional unit production is calculated. Under…

Q: Heble budget for selling and administrative expenses for a service company Digital Solutions Inc.…

A: Variable costs :— It is the cost that changes with change in activity of cost driver. Variable cost…

Q: The three most common cost behavior classifications are a. variable costs, product costs, and sunk…

A: Cost volume profit analysis includes various techniques that help in the decision-making of the…

Q: Cost-volume-profit analysis (CVP Analysis) requires management to classify all costs as either…

A: Cost volume profit analysis (CVP Analysis) helps the business entity in determining the impact on…

Q: Explain the concept of a contribution margin and describe how it differs from gross margin. Also,…

A: Contribution Margin represents the incremental money generated for each product/unit sold after…

Q: Mark up can be calculated by the formula; a. Markup = Cost + Expenses b. Markup = Cost + Profit c.…

A: Markup refers to the difference between the selling price of a good or service and its cost

Q: . Provide examples of how cost–volume–profit analysis can be used for decision-making. 2. Explain…

A: CVP stands for Cost volume profit analysis refers to finding out how the changes in the fixed costs…

Q: Contribution margin is equal to        a. Sales - Fixed expenses       b. Sales - Selling expenses…

A: Contribution margin refers to the amount of sales revenue left after deducting variable cost.

Q: Indirect and common costs often make up a significant portion of the cost of a product. All of the…

A: Indirect costs are expenses that support the overall operation of a business and must be allocated…

Q: How cost accounting is useful where financial accounting could not be answered. Give any exampleto…

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: c) Why do the Total Cost Method and the Cost of Sales Method lead to the same Operating Result?

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: Joint cost CO

A: Joint cost is the cost of producing two or more products at same time.

Q: not easily traceable and are allocated to a cost object u not abbreviate or add any extra spacing in…

A: Direct costs refer to those expenses which can be directly related to a product or a service.

Q: All of the following represents a cost -volume -profit relationship except : a. Profit = totalcon…

A: CVP analysis is the analysis which is more helpful in determining the effects of variation in the…

Q: f the following expenses, which are NOT period costs?     distribution expenses.     research…

A: The period costs are the costs that are not related to production of the product.

Q: Gross profit minus total operating expenses is called ____________. Group of answer choices income…

A: Gross Profit: After deducting all of the expenditures that are associated with the production and…

Q: What are: Relevant / irrelevant / Differential Costs Relevant / irrelevant / Differential Revenues…

A: Relevant / Irrelevant / Differential Costs: Relevant Costs are the cost which are relevant in…

Q: avoidable and unavoidable cost?

A: Costs are the amount incurred for the different purposes of the business. It is defined in monetary…

Q: Which format of the Income Statement is appropriate for financial reporting? O Variable costing O…

A: The appropriate format for the Income Statement for financial reporting is typically the Absorption…

Q: A CVP income statement shows contribution margin and gross profit. True False

A: The CVP Income Statement or an Cost- Volume- Profit Income Statement is almost similar to an…