The Contribution Income Statement Differs from the Traditional Income Statement

Multiple Choice

The contribution income statement differs from the traditional income statement in which of the following ways?

A) The traditional income statement separates costs into fixed and variable components.
B) The traditional income statement subtracts all variable costs from sales to obtain the contribution margin.
C) Cost-volume-profit relationships can be analyzed more easily from the contribution income statement.
D) The effect of sales volume changes on profit is readily apparent on the traditional income statement.
E) The contribution income statement separates costs into product and period categories.