Creating Contribution Margin Income Statements

Instructions:

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question 1 of 3

XYZ Furniture had a very good year financially in 2016. They did $1.6 million in total sales. They paid $475,000 in wages to their manufacturing employees, and they paid $300,000 for the wood and other materials used for production. What was their contribution margin in 2016?

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1. What are variable labor expenses?

2. What are variable production expenses?

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About This Quiz & Worksheet

The quiz and worksheet will measure your understanding of contribution margin income statements. Topics you should be familiar with include variable labor expenses and total sales.

Quiz & Worksheet Goals

To pass the quiz, you'll need to correctly answer questions on the following terms:

  • Variable labor expenses
  • Total sales
  • Contribution margin income statement
  • Contribution margin
  • Variable production expenses

Skills Practiced

  • Defining key concepts - ensure that you can accurately define main phrases, such as variable labor expenses and variable production expenses
  • Reading comprehension - ensure that you draw the most important information from the related lesson on contribution margin income statements
  • Knowledge application - use your knowledge to answer a question about the contribution margin

Additional Learning

Get to know much more about the contribution margin income statements, by taking a look at the lesson titled Creating Contribution Margin Income Statements. The lesson covers the following objectives:

  • Explore how to make a contribution margin income statement
  • Recall the significance of the contribution margin
  • Review the reasons why management is interested in writing these statements and reports
  • Identify the differences between a contribution margin income statement and a regular income statement
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