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    National Linen Contribution Margin uses and statement

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    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.

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    https://brainmass.com/business/accounting/national-linen-contribution-margin-uses-and-statement-559893

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    Tutorial:

    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
    Sales
    -COGS < --- product costs
    =Gross Profit
    -Operating expenses < -- non product costs
    =Operating income

    TRADITIONAL FORMAT
    Sales
    -variable costs < --- includes variable product and nonproduct costs
    = ...

    Solution Summary

    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.

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