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What is contribution margin income statement

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Reference no: EM132561601

The following data are for Paso Robles Company for the year ended 2009 December 31:

COSTS :

DIRECT MATERIAL $90000

DIRECT LABOR 130000

MANUFACTURING OVERHEAD :

VARIABLE 45000

FIXED 90000

SALES COMMISSION (VARIABLE) 25000

SALES SALARIES (FIXED) 20000

ADMINISTRATIVE EXPENSES (FIXED) 35000

SELLING PRICE PER UNIT 10

UNITS PRODUCED AND SOLD 60000 UNITS

Question (a) Assume that for the above data, you had inventory of 5000 units at the end of year, contribution margin income statement and a traditional income statement.

Question (b) Comment on the difference between net income calculated through the above mentioned approaches.

Reference no: EM132561601

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