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2 years ago

What is the difference between a contribution approach income statement and a traditional approach income statement?

1 answer:

5 0

Contribution approach Income statement- In this Statement Company's Variable costs deducted from Sales to arrive at contribution margin. After that Fixed expenses are deducted from contribution margin for arriving at profit for the period.

Basically , this statement separated fixed and variable expenses of a period to arrive at profit of the company.

It separates all the costs between fixed and variable whether it is manufacturing costs or Selling or administrative costs.

Traditional Approach Income statement- It is non other than profit and loss account of an entity. it reflects whether a company generating profit or making loss during a period.

It separates the Manufacturing costs from Selling and administrative costs. Manufacturing costs deducted from sales to arrive at gross profit. after that selling and administrative costs deducted from gross profit to arrive at net profit.

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Answer:

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Explanation:

This type of clock will be handy for those who want to celebrate their friends' 50th birthdays and other anniversaries. It will also immortalize the Beautiful Clock Company as an entity that lives with the time. This clock will be exciting to its affluent clientele, who are always in celebration moods.

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3 years ago

Technology influences the inner workings of a free-market

Genrish500 [490]

True hope this is correct

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3 years ago

Discovering the process of distribution of commonly used items is quite interesting and opens eyes to several new processes and

myrzilka [38]

Answer and Explanation:

The distribution of laundry detergent can happen in two ways. The first way, occurs with a distribution of the factory direct to the retailers of a country. These retailers, receive the detergents, store large inventories and send them to smaller stores, within a given region. This type of distribution has a lower economic cost, which causes the detergent to be sold at lower prices.

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3 years ago

Which of the following equations is true? Select one: a. Contribution margin = Sales revenue × Variable cost ratio b. Contributi

m_a_m_a [10]

Answer: c. Contribution margin ratio = 1 − Variable cost ratio

Explanation:

The Contribution margin ratio is defined as the difference between the sales price of a good and it's variable costs. It is expressed as a percentage.

The formula is,

Contribution Margin Ratio = Sales - Variable Costs / Sales

Breaking the formula down further we have,

Contribution Margin Ratio = Sales/ Sales - Variable Costs / Sales

Contribution Margin Ratio = 1 - Variable Costs / Sales

Variable Cost/Sales is the Variable Cost Ratio.

So Option C is correct.

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3 years ago

Which inventory costing method assumes that items in ending inventory are the most recently acquired?

dexar [7]

The Last-In, First-Out (LIFO) inventory costing method assumes that items in ending inventory are the most recently acquired.

<h3>What is LIFO and FIFO methods of inventory?</h3>

LIFO refers to the Last In, First Out. LIFO is a method that assumes that the last unit that has been added in the inventory or more recently, will be sold first.

FIFO stands for First In, First Out. FIFO method assumes that the oldest unit of inventory that has been added first, would be sold first.

Basically, FIFO and LIFO accounting are the inventory costing methods used in managing inventory.

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2 years ago