Which of the Following Income Statement Formats Is Most Commonly

Multiple Choice

Which of the following income statement formats is most commonly used with flexible budgeting?

A) Sales − Variable costs = Contribution margin; Contribution margin − Fixed costs = Net income
B) Sales − Cost of goods sold = Gross margin; Gross margin − Operating expenses = Net income
C) Sales − Manufacturing costs − Selling and administrative costs = Net income
D) None of these answers are correct.