you will discuss the ways contribution margin is used to determine the impact of changes in sales on income. As an accountant for a business that is interested in sales and income (in other words, every business) you may be called upon to analyze this information.
Please respond to all of the following prompts in the class discussion section of your online course:
Describe a scenario in which a business would utilize a contribution margin income statement. Why would they use one? What would it tell them?
How does a change in sales impact the contribution margin? Net income?
If you were preparing a contribution margin statement, would you prepare it per unit or as a ratio? Why would you choose one over the other?