Question 1
Which of the following would be subtracted from sales while calculating contribution margin in a variable costing format of an operating income statement?
◦ Direct labor in factory
◦ Rent on factory building
◦ Rent on the headquarters building
◦ Sales commission on incremental sales
Question 2
Absorption costing enables managers to increase operating income by increasing the unit level of sales, as well as by producing more units.
◦ true
◦ false