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contribution income statement

contribution income statement - 44,000 Net operating income...

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TM 5-1 TRADITIONAL VERSUS CONTRIBUTION INCOME STATEMENT Traditional Approach (costs organized by function) Contribution Approach (costs organized by behavior) Sales. ............................... $60,000 Sales $60,000 Less cost of goods sold*. .   34,000     Less variable expenses: Gross margin. .................. 26,000 Variable production. ..... $12,000 Less operating expenses: Variable selling. ........... 3,000 Selling*. ......................... $15,000 Variable administrative     1,000       16,000     Administrative*. .............       6,000       21,000     Contribution margin.
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Unformatted text preview: ....... 44,000 Net operating income. ...... $ 5,000 Less fixed expenses: Fixed production. ......... 22,000 Fixed selling. ................ 12,000 Fixed administrative. .... 5,000 39,000 Net operating income. .... $ 5,000 * Contains both variable and fixed elements since this is the income statement for a manufacturing company. If this were a merchandising company, then the cost of goods sold would be entirely variable....
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  • Spring '09
  • EDWARDMCDEVITT
  • ........., $12,000, $ 5,000, $15,000      6,000      21,000, $60,000    16,000   44,000    39,000, $60,000    34,000   26,000

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