The most important distinction is that the income statement on page 33 is presented in the contribution nest format, charm that on page 55 is presented in the traditional usable approach format. Essentially, the contribution approach divides comprises between those that argon unsettled (pre-contribution margin) and those which are fixed, with respect to activity. In contrast, the traditional approach separates costs by their source (operational areas), e.g. production, administration, sales etc., regardless of whether they are variable or fixed.
The contribution approach is particularly blue-chip as a management tool for planning, control and decision-making connect to internal activities. Although statements in this format can be presented in financial reports outside the company, they are not intended or accepted as substitutes for traditional format financial statements in submissions to the government because they are not consistent with the formalities of chiefly Accepted Accounting Principles (GAAP).
The expenses shown on page 50 that step forward to have been reclassified as variable selling costs on page 33 are Distribution and transport (€29,988,000) and gross sales commission (€73,573,000).
These appear to be the ones reclassified because:
(1) they are both variable costs;
(2) they add up to €103,561,000, almost exactly (rounding wrongdoing only) €104,000,000; and
(3) Selling, general and administrative expenses of €539,797,000 (on page 50) is almost exactly €104,000,000 greater than General and administrative expenses of €436,000,000 (on page 33).
2) Cost of Sales is include in the computation of contribution margin in the statement on page 33 because the contribution margin emphasizes cost behavior and the Cost of Sales is characteristic of a...If you want to sign up a full essay, order it on our website: Ordercustompaper.com
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