What makes a contribution income statement unique? Using the company (National Linen) discuss how a contribution income statement could be used to improve planning in that particular company.
A contribution margin income statement sorts expenses by their behavior, either variable or fixed. A traditional income statement sorts by product or nonproduct. See exhibits below:
CONTRIBUTION MARGIN FORMAT
-COGS < --- product costs
-Operating expenses < -- non product costs
-variable costs < --- includes variable product and nonproduct costs
Your discussion is 269 words and shows classic traditional and contribution margin formats and discusses several ways National Linen uses a contribution margin to make decisions.