Following are two income statements: internal (contribution margin income statement, with costs classified by behavior) and external
Question:
Following are two income statements: internal (contribution margin income statement, with costs classified by behavior) and external (a traditional income statement, with GAAP-based costs classified by function).
a. Identify the items that would have a different amount reported (not just placement on the income statement).
b. In terms of planning and controlling, in making the decision to increase unit sales, which information is found on the contribution margin income statement that is not found on the external income statement?
Transcribed Image Text:
Contribution Margin Income Statement Sales $ xx Variable Costs: Direct Materials $ x Direct Labor x Variable Overhead x Variable Selling and Administrative (xx) Fixed Overhead (xx) Contribution Margin: $ xx Gross Margin: $ xx Fixed Costs: Fixed Overhead $ x Traditional (Functional) Income Statement Fixed Selling and Administrative (xx) Net Income: $ xx Sales: $ xx Cost of Goods Sold: Direct Materials $ x Direct Labor x Variable Overhead x Selling and Administrative Expense: Variable Selling and Administrative $ x Fixed Selling and Administrative (xx) Net Income: $ xx
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a Fixed overhead On the traditional income statement fixed over...View the full answer
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Related Book For
Managerial Accounting
ISBN: 9780137689453
1st Edition
Authors: Jennifer Cainas, Celina J. Jozsi, Kelly Richmond Pope
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