Total variable cost is typically the sum of all variable labor, variable materials, and variable overhead expenses.
Contribution income statement highlights the variable expenses as well fixed expenses incurred by company for selling goods or services.
Income statement in financial reporting is different in this sense that in that income statement all expenses and incomes are shown as incomes and expenses and there is no classification of fixed expenses or variable expense while in contribution margin income statement expenses are shown in this way that separate the fixed expenses from variable portion of expenses.
A contribution margin income statement is an income statement in which all variable expenses are deducted from sales to arrive at a contribution margin. It is the expanded version.
a. sales-net operation incomeb. sales-(variable expenses/contribution margin)c. sales-(fixed expenses/contribution margin ratio)d. sales-(variable expenses + fixed expenses)
Contribution margin is computed as sales revenue minus variable expenses
Contribution margin income statement differs in this way that it only deduct the variable cost from sales to point out that how much is any unit of product is contributing towards recovery of fixed cost while normal income statement don't show this information.
sales-variable coste= contribution margin
contribution margin = sales - variable cost
NMC = [Market Demand x Market Share x(Revenue per Customer - Variable cost per customer) ] - Marketing Expenses
sales-variable cost= contribution
contribution
Variable expenses