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Financial vs Managerial? Contribution margin vs COGS?

Answer two of the following with factual opinions:

1. How is the purpose of managerial accounting different from financial accounting?

2. Are more accountants involved in the financial or managerial function today?

3. Comment on the use of a functional versus absorption income statement. Describe the differences in presentation and use of each type of income statement.

4. How is the concept of cost of goods sold different than contribution margin?

5. Explain the contribution margin concept/computation and when to use the information.

Solution Preview

1. How is the purpose of managerial accounting different from financial accounting?

Managerial accounting uses financial and non-financial information to support decisions, monitor performance and control operations of the business. One of the key sources of financial information is the financial statements, but in greater detail than what is published to outside parties in the formal financial statements.

The purpose of financial accounting is to produce the generally accepted accounting principles financial statements. That is, the collect, summarize and report the ...

Solution Summary

Your tutorial is 309 words plus a simple excel example to show the difference between cost of goods sold and contribution margin.

$2.19