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Tugasan Bab 5

The document compares a traditional income statement approach and a contribution approach. In the traditional approach, costs are organized by function with categories for cost of goods sold, gross margin, and selling/administrative expenses. In the contribution approach, costs are organized by behavior with variable expenses deducted first to determine contribution margin, then fixed expenses are deducted to determine net operating income. Both approaches result in the same net operating income of $1,000 for the example provided.

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41 views1 page

Tugasan Bab 5

The document compares a traditional income statement approach and a contribution approach. In the traditional approach, costs are organized by function with categories for cost of goods sold, gross margin, and selling/administrative expenses. In the contribution approach, costs are organized by behavior with variable expenses deducted first to determine contribution margin, then fixed expenses are deducted to determine net operating income. Both approaches result in the same net operating income of $1,000 for the example provided.

Uploaded by

durattul_syida
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Tugasan bab 5(MA)

Question 5-14 What is the difference between a contribution approach income statement and a
traditional approach income statement?

Traditional Approach(costs organized by function)

Sales 12,000

Cost of good sold 6,000

Gross margin 6,000

Selling and administrative expenses:

selling 3,100

administrative 1,900 5,000

Net operating income $1,000

Contribution Approach (costorganized by behavior)

Sales 12,000

Variable expensese:

variable expenses 2,000

variable selling 600

variable administrative 400 3,000

Contribution margin 9,000

Fixed expenses:

fixed production 4,000

fixed selling 2,500

fixed administrative 1,500 8,000

Net operating income $ 1,000

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