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The CVP income statement classifies costs:_______.
a. as variable or fixed and computes contribution margin.
b. by function and computes a contribution margin.
c. as variable or fixed and computes gross margin.
d. by function and computes a gross margin.

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Answer:

a. as variable or fixed and computes contribution margin

Explanation:

CVP means cost volume profit. CVP income statement is mainly for internal use.CVP income statement classifies costs as variable or fixed and computes contribution margin.

CVP income statement is used to determine the relationship between changes in costs and volume and the company's operating/net income.

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