On a departmental income statement, sales less cost of goods sold and direct expenses equals:

A) gross margin.
B) income before taxes.
C) indirect expenses.
D) departmental contribution margin.

Departmental Income Statement

A financial statement that shows the revenue, expenses, and net income for each department within a company, helping to track the performance of distinct areas of the business.

Cost of Goods Sold

The costs incurred directly from the production of goods a company offers for sale, which include material and labor expenses.

Direct Expenses

Direct expenses are costs that can be directly traced to a specific cost object, such as a product, department, or project.