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What is the difference between a contribution approach income statement and a traditional approach income statement?
Under the contribution approach (variable costing), all variable expenses (both manufacturing and non-manufacturing) are deducted first from sales to arrive at contribution margin.
Fixed costs (both manufacturing and non manufacturing) are deducted from contribution margin to arrive at net income before taxes.
Under traditional approach (absorption costing), all the manufacturing costs (both fixed and variable) are deducted from sales to arrive at gross profit (margin).
Non-manufacturing (Selling and administrative) costs are then deducted from gross margin to arrive at net income before taxes.
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Definition of industrial origin approach?
Industrial origin approach refers to contribution of resources from different sectors for the production of goods and services. This approach is also called value added approach.
What is the difference in traditional and modern approach in financial management?
Oh, dude, the traditional approach in financial management is like your grandma's recipe for apple pie - tried and true, but a bit old-fashioned. The modern approach is more like a fancy food truck serving up fusion cuisine - innovative, flexible, and always trying new things. So, yeah, traditional is like sticking to the same old routine, while modern is all about shaking things up and adapting to the ever-changing financial landscape.
What is the difference between a global and a multidomestic approach to business?
A global approach to business focuses on having a business in many nations. A multi-domestic approach to business means that a business has many businesses in one nation.
Increased use of long-term financing is generally a more conservative approach to current asset financing?
yes this is a true statement
Differentiate between profit maximisation and wealth maximisation?
The traditional approach of financial management was all about profit maximization.The main objective of companies was to make profits.The traditional approach of financial management had many limitations:1.Business may have several other objectives other than profit maximization.Companies may have goals like: a larger market share, high sales,greater stability and so on.The traditional approach did not take into account so many of these other aspects.2.Profit Maximization has to defined after taking into account many things like:a.Short term,mid term,and long term profitsb.Profits over period of timeThe traditional approach ignored these important points.3.Social Responsibility is one of the most important objectives of many firms.Big corporates make an effort towards giving back something to the society.The big companies use a certain amount of the profits for social causes.It seems that the traditional approach did not consider this point.Modern Approach is about the idea of wealth maximization.This involves increasing the Earning per share of the shareholders and to maximize the net present worth.Wealth is equal to the the difference between gross present worth of some decision or course of action and the investment required to achieve the expected benefits.Gross present worth involves the capitalised value of the expected benefits.This value is discounted a some rate,this rate depends on the certainty or uncertainty factor of the expected benefits.The Wealth Maximization approach is concerned with the amount of cash flow generated by a course of action rather than the profits.Any course of action that has net present worth above zero or in other words,creates wealth should be selected.
What approach to the income statement organizes costs by function?
traditional approach
What is traditional approach income statement?
In traditional approach income statement, overheads are charged to product based on predetermined rate rather then based on actual activity.
What is a contribution approad income statement?
1. Contribution approach income statement is different from simple income statement in this sense that in contribution margin approach variable costs are deducted from revenues to find out how much any sale of unit of product is contributing towards recovery of fixed cost of product.
General approach to financial statement analysis?
Generally,there are two approaches to financial statement analysis,one the is the traditional approach where use of ratio analysis is applied and all information for analysis will be gathered from balance sheet and income statement.In recent times trend analysis and common-size statement has been used.The second is the modern approach where both internal and external business environment are taken into consideration.The approach is futuristic as opposed to traditional approach. The financial statement may be also analyzed horizontally or vertically,across industry,in macro(in aggregate manner) and also in the firm either top down or bottom up.
What are the limitation of contribution approach?
Your nasty bum!
What is traditional approach to historical approach?
whats is hegemony
What is the difference between the traditional and database approach to data management?
The traditional approach to data management typically involves manual record-keeping in physical files or documents. In contrast, the database approach uses digital databases to store, organize, and retrieve data efficiently. Databases allow for structured data storage, easy data manipulation, and improved data security compared to traditional methods.
The Contribution Margin Approach to Income?
Contribution margin approach to income teaches the management about how much production volume must achieve to at least recover the full cost of production.
The Absorption approach to the computation of manufacturing cost differs from the contribution approach because the absorption approach includes?
All fixed costs.
'Ordinal approach is rational than cardinal approach' critically evaluate this statement?
'Ordinal approach is rational than cardinal approach' This statement is not a properly formed phrase, please ask questions that make sense.
The difference between the product and process approach to writing?
The product approach is a traditional approach where students work solitary and are encouraged to model a specific format for writing reports and essays. The process approach to writing allows students to express language through brainstorming, classroom discussions, and re-writing.
Behavioral and traditional approaches in international relations?
traditional approach versus behaviorists
