From a management perspective what does the contribution

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Reference no: EM13600225

Jonathan & Pam Reedus' business, "Reedus Clothing Mart" reported the financial information below for the month of July in 2012:
Sales Revenue............................................................$ 420,000
Cost of goods sold (variable) ............................................ 168,000
Sales and commissions (variable..................................... 107,000
Shipping expenses (variable).......................................... 44,000
Advertising expense (fixed)............................................. 70,000
Insurance expense (fixed)................................................ 9,000
Depreciation expense (fixed).......................................... 42,000

Required:
[A] Prepare an income statement using the contribution format.
[B] From a management perspective, what does the contribution format reveal to the Reeduses that the traditional format may not directly emphasize? Be thorough and specific.

Reference no: EM13600225

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