Homework Answers
Answer choice B Traditional approach YES & Contribution Approach NO
Refer to below format of income statement under both options
Traditional approach
| Sales | XXX |
| Less cost of goods sold | XXX |
| Gross margin | XXX |
Contribution approach
| Sales revenue | XXX |
| Less variable cost | (XXX) |
| Contribution margin | XXX |
| Less fixed costs | (XXX) |
| Net income /(loss) | XXX |
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