Income statement attached
Putting Fixed and Variable Costs to work in the Income Statement.
The income statements shown below are NOT for a manufacturing firm; they are for a RETAILER.The retailer income statements are simpler in form and therefore more appropriate for an introduction to the statement.
Two types of income statements are shown:The Traditional Format, which is used for external reporting and the Contribution Margin or Variable format, which is used internally because it provides valuable information on fixed and variable costs. Managerial accounting’s focus is internal. The Contribution or Variable format of income statement is not permitted for external financial reports used by investors, creditors, IRS, etc.
The following information pertains to Furniture R Us, a retailer.Furniture R US buys products from Ergo Eco Furniture Manufacturer, but does not manufacture the product itself.
products from Ergo Eco Furniture Manufacturer, but does not manufacture the product itself.
Furniture R US is a customer of Ergo Eco Furniture Manufacturer. Data can be inputted into the yellow cells.
Leave the unshaded cells ALONE. The resulting income statements shown at the right. Leave the income statement cells ALONE, too.