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Contribution margin income statement is more useful to management since management decision is based on contribution because contribution is revenue (-) variable cost and this statement clearly differ what cost is fixed and what is variable.since variable cost and revenue are important for decision making and fixed cost is important but not if it's already incurred then it's sunk cost.
Traditional income statement doesn't differ between variable and fixed cost for example labor cost can be variable and fixed but it will be shown as variable and fixed under contribution margin fixed cost however under traditional income statement it will be only Labor cost in totality.
Management Take decisions based on fixed and variable costs as well as contributions margins which can be only shown in Contribution margin income statement.
For example
If management wants to sell particular product 1000 units to a customer for $100 whereas total cost per unit is $120 (fixed $30+variable $90) then from traditional income statement it may look that selling product will be unprofitable ($100-$120)=-$20. However since management use contribution margin statement under which product will be profitable since fixed cost is sunk cost therefore management will take decision based on contribution of $10($100-$90) and will accept the proposal and will earn extra income of $10 per unit for $1000 Units = $10000.
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