Which of the following will usually be found on an income statement prepared using absorption costing? Contribution Margin / Gross Margin? A) Yes / Yes B) Yes / No C) No / Yes D) No / No

C) No/Yes

Explanation:

An income statement (profit and loss account) is one of the financial statements of a company and shows the company's revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income or net profit

Absorption cost is a method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.

How do you calculate total period cost under absorption costing?

Income statement shows Sales - Cost of Goods sold = Gross Margin (or Gross Profit) - Operating Expenses = Net Income and is based on the number of units SOLD.