Question
Organizing information in a manner that is useful to management is important. The traditional income statement format used for external financial reporting simply breaks costs
Organizing information in a manner that is useful to management is important. The traditional income statement format used for external financial reporting simply breaks costs down by functional area: cost of goods sold and selling and administrative costs. It does not show fixed and variable costs. How can this information be presented in an income statement that shows fixed and variable costs separately that could be useful to management? Please identify a company of your choice and explain in detail how this information would be useful to that company.
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