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Financial vs Managerial? Contribution margin vs COGS?

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

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

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Solution Summary

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

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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 ...

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Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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