Week 1 Discussion

Start by choosing one of the following two topics to discuss as your initial post and reply under the appropriate thread below:

1. Something old, something new: Did you learn something in this chapter that you did not know before? Or, did you gain confidence because you determined that you have already mastered a concept presented in this chapter?
2. Managerial Accounting :  Please explain how the Contribution Income Statement creates value for management and how it differs from the Income Statement?

Week 1 Discussion Answer

Contribution Income Statement and the traditional Income Statement differ in the manner of computation. To come up with the net operating income using the traditional method, you have to get the gross margin first by deducting the cost of goods sold from the sales, then deducting the selling and administrative expenses from the gross margin.