Question

Net income under variable costing is contribution margin less Select one: a. cost of goods sold. b. fixed manufacturing overhead and fixed selling and administrative expenses. c. fixed manufacturing overhead and variable manufacturing overhead. d. variable selling and administrative expenses and fixed selling and administrative expenses.

Answer 1

Answer:b fixed manufacturing overhead and fixed selling and administrative expenses.

Step-by-step explanation:

Variable costing deducts variable costs from revenue to arrive at contribution margins from which all fixed cost are deducted to arrive at the net income.

The cost of goods sold, variable costs and other costs are not deducted from the contribution margin except the fixed cost in variable costing method.