A CVP income statement is frequently prepared for internal use by management. Describe the features of the CVP income statement that make it more useful for management decision-making than the traditional income statement that is prepared for external users.

Several features of the CVP income statement make it more useful for internal decision-making. The CVP income statement classifies costs as either fixed or variable rather than by function. Being able to identify the behavior of costs in this manner can aid management in controlling those costs.
Also the CVP income statement shows the contribution margin rather than a gross profit. This helps management establish the extent to which their sales are able to cover their fixed costs and to analyze the impact on net income of changes in sales or costs.