George Edmonds, the new accountant for Zigler Company, has recommended the preparation of income statements reporting contribution

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George Edmonds, the new accountant for Zigler Company, has recommended the preparation of income statements reporting contribution margin rather than statements reporting gross profit. He states that the income statement with contribution margin provides better information. Kimberly Johnson, the manager, disagrees that one statement is better than the other. She says gross profit is the same as contribution margin, so it does not make any difference which statement is prepared. Which person is correct? Explain.

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Accounting Advanced

ISBN: 9780538447553

9th Edition

Authors: Claudia Bienias Gilbertson

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