Gross margin is included on the income statement under which format(s)?A)B)Contribution TraditionalApproachApproachYesYesYesNoNOYesNoNo

Answered: Gross margin is included on the income…

Gross margin is included on the income statement under which format(s)? A) B) C) D) Contribution Traditional Approach Approach Yes Yes Yes No No Yes No No

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Gross margin is included on the income statement under which format(s)?
A)
B)
Contribution Traditional
Approach
Approach
Yes
Yes
Yes
No
NO
Yes
No
No

Expert Solution

Step 1

Gross Margin is included on the income statement under traditional approach.

Gross Margin = Sales - Cost of Goods Sold

Contribution Margin is included on the income statement under contribution approach.

Contribution Margin = Sales - Variable Expenses

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