Prepre a functional income statement and a contribution format income statement

Contribution IS.doc 2 types of Income Statements 1) Traditional Approach (Functional) (Costs are organized by department or function.) II. Contribution Approach (Costs are organized by behavior) Sales Sales - Cost of Goods Sold - Variable Costs Gross profit Contribution Margin - Selling & Admin. - Fixed Costs Net Income from operations Net Income from operations Example: assume the following (all numbers in thousands) Total Revenue: $100 Cost of Goods Sold V.C $10 F.C. $30 Selling & Admin. V.C. $7 F.C. $3 Required: Prepare a "functional" income statement and a "contribution" format income statement, - End of document