Shawna's Smoothies has the following cost information for the current month: Shawna would like to know how profitable the business was for the current month. She is not sure which income statement format is best for her to given her insight into what is contributing to the profitability of the business. She has asked for a traditional income statement and a contribution margin income statement to be prepared (headings not required).
a) Is the operating income different based on the type of income statement prepared?
b) Which type of income statement is normally used for internal reporting purposes? Which type of income statement is normally used for external reporting purposes?

Question

Shawna's Smoothies has the following cost information for the current month:  Shawna would like to know how profitable the business was for the current month. She is not sure which income statement format is best for her to given her insight into what is contributing to the profitability of the business. She has asked for a traditional income statement and a contribution margin income statement to be prepared (headings not required). 
a) Is the operating income different based on the type of income statement prepared? 
b) Which type of income statement is normally used for internal reporting purposes? Which type of income statement is normally used for external reporting purposes?

Quizplus · Accepted Answer

The Answer of Shawna's Smoothies has the following cost information for the current month:  Shawna would like to know how profitable the business was for the current month. She is not sure which income statement format is best for her to given her insight into what is contributing to the profitability of the business. She has asked for a traditional income statement and a contribution margin income statement to be prepared (headings not required). 
a) Is the operating income different based on the type of income statement prepared? 
b) Which type of income statement is normally used for internal reporting purposes? Which type of income statement is normally used for external reporting purposes?

Shawna's Smoothies Has the Following Cost Information for the Current