In a contribution margin income statement, where are fixed costs located?

In a contribution margin income statement, fixed costs are located below the contribution margin line. The contribution margin represents the amount remaining from sales revenue after variable costs have been subtracted. This format emphasizes how much of the revenue contributes to covering fixed costs and generating profits.

By placing fixed costs below the contribution margin line, the statement clearly shows the relationship between sales, variable costs, and how fixed costs impact profitability. This layout allows users of the statement to easily see the contribution margin available to cover fixed costs and assess the company's performance relative to its operating expenses.