Which of the following formats is typically used in year-to-date income statements prepared for internal use under a responsibility accounting system?
A. Sales - Cost of Goods Sold = Gross Margin; Gross Margin - Operating Expenses = Net Income
B. Sales - Variable Costs = Contribution Margin; Contribution Margin - Fixed Costs = Net Income
C. Sales - Manufacturing Costs = Manufacturing Margin; Manufacturing Margin - Selling and Administrative Costs = Net Income
D. None of these answers are correct.
Answer: B
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