The contribution margin income statementa. reports expenses based on cost behavior pattern rather than cost function.b. unitizes fixed costs.c. shows contribution margin rather than operating income as the bottom line.d. is sometimes used for financial reporting purposes.e. none of the above.Use the following information for Questions 9 and 10.O’Brien, Inc.’s, 2013 contribution margin income statement shows thefollowing:Sales @ $10 per unit . . . . . . . . . . . . . $ 160,000Less: Variable expense . . . . . . . . . . . (128,000)Contribution margin. . . . . . . . . . . . . . $ 32,000Less: Fixed expenses . . . . . . . . . . . . (44,000)Operating income (loss) . . . . . . . . . . . $ (12,000)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The contribution margin income statement
a. reports expenses based on cost behavior pattern rather than cost function.
b. unitizes fixed costs.
c. shows contribution margin rather than operating income as the bottom line.
d. is sometimes used for financial reporting purposes.
e. none of the above.
Use the following information for Questions 9 and 10.
O’Brien, Inc.’s, 2013 contribution margin income statement shows the
following:
Sales @ $10 per unit . . . . . . . . . . . . . $ 160,000
Less: Variable expense . . . . . . . . . . . (128,000)
Contribution margin. . . . . . . . . . . . . . $ 32,000
Less: Fixed expenses . . . . . . . . . . . . (44,000)
Operating income (loss) . . . . . . . . . . . $ (12,000)
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