10 points Question 5 Contributory incomes are: departmental incomes before deduc
ID: 2600449 • Letter: 1
Question
10 points Question 5 Contributory incomes are: departmental incomes before deduction of indirect expenses the same as gross margin sales revenues less indirect expenses income before income tax 10 points Question 6 Gross margin is: income before income tax sales revenue less indirect expenses sales revenue less cost of sales sales revenue less direct expenses 10 points Question 7 departmental sales revenue mix refers to the: ratio of sales revenue of various departments to total company sales revenue ratio of indirect expenses allocated to departments based on the basis of sales revenue ratio of direct expenses allocated to departments based on sales revenue deduction of indirect expenses from a department's sales revenue to arrive at contributory income 10 points Question 8 Financial statement analysis is carried out by: Management for the use of its employees. Various readers of financial statements for their own particular purposes Management for the use of the tax department. Stockholders for the use of management.
Explanation / Answer
5) Contributory Incomes of department is equal to departmental sales revenue less departmental expenses (or direct costs) not indirect costs. Therefore Contributory income are departmental incomes before deduction of indirect expenses.
6) Gross Margin is Sales Revenue less cost of goods sold or cost of sales.
7) Departmental sales revenue mix refers to the ratio of sales revenue of various departments to total company sales revenue.
8) Financial statement analysis is carried out by various readers of the financial statements for their own particular purposes. Financial statement analysis is the process of reviewing and analyzing a company's financial statements to make better economic decision. It is used by a variety of stakeholders, such as credit and equity investors, the government, the public and decision makers within the organization.
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