Because CVP is so important for desicion making, management often wants this information reported in a CVP ioncome statement. The CVP income statement classifies costs as variable or fixed and computes a contribution margin. Contribution margin is the amount of revenue remaining after deducting variable costs. It is often stated both as a total amount and on a per unit basis.
A traditional income statement and a CVP income statement both report the same bottom line net income. However a tradition income statement does not classify costs as variable or fixed, and therefore a contribution margin would not be reported. In addition, both a total and a per unit amount are often shown in a CVP income statement to facilitate CVP analysis.
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