Unformatted text preview: “functional” format – emphasizing the functions of production, administration, and sales in the classification and presentation of cost data. No attempt is make to distinguish between variable or fixed costs included under each function heading such as cost of goods sold, selling expenses, and administrative expense. Therefore, it does not report a contribution margin. In sum, the traditional income statement has serious limitations when used for management decision making, because the manager needs cost data organized in a format that will facilitate carrying out planning, control, and decision-making responsibilities. The CVP income statement has been developed in response to this need....
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- Spring '10
- Managerial Accounting, CVP Income Statement