Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 9

Gross Margin and Contribution Margin Income Statements

Refer to Exercise 2-38.

Required

Prepare:

a. A gross margin income statement.

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b. A contribution margin income statement.

Step 1 of 8

Variable costs

Variable costs are the costs which varies with the output of quantity produced that is if the number of units produced increases then the variable cost would also increase.