Question 1. What is the difference in calculation between the absorption costing and variable costing approaches?
Question 2. Can you give specific benefits to be derived from using the information from computing gross profit on sales as opposed to contribution margin?
Question 3. Is net income always going to be the same regardless of the accounting approach?
Question 4. Why don't we use the contribution margin format for external reporting?
Question 5. Which income statement is classified by function, and which one is classified by behavior?