Category Archives for Managerial Accounting Topics

Mixed Cost and The High-Low Method

In the previous post about mixed cost, we stated that a mixed cost is just the sum of the variable and fixed components. This is fairly easy to deal with when we are dealing with an external cost where

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Absorption Costing and Variable Product Costing

There are two major costing methods, used for creating income statements in managerial accounting: absorption costing and variable costing. These two methods vary based on the way that fixed overhead is

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The Traditional Income Statement (Absorption Costing Income Statement)

The traditional income statement, also called absorption costing income statement,  uses absorption costing to create the income statement. This income statement looks at costs by dividing

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The Contribution Margin Income Statement

The contribution margin income statement is a very useful tool in planning and decision making. While it cannot be used for GAAP financial statements, it is often used by managers internally. The contribution

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Contribution Margin

Contribution margin is one of the most important concepts in managerial accounting. It is used extensively in planning and decision making because it is much easier to use than absorption costing, especially

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