Which of the following statements is true regarding an income statement that recognizes the cost of unused capacity?

a). It is generally used for external reporting purposes.
b). It deducts the cost of unused capacity from sales to derive the gross margin.
c). It adds the cost of unused capacity to sales to derive the gross margin.
d). It treats the cost of unused capacity as a period expense in the income statement.

Answer rating: 100% (QA)

option D is correct It treats the cost of unused capacity as a pe... View the full answer