The Bottom Line of a Contribution Margin Report Is Net

question 38

True/False

The bottom line of a contribution margin report is net income.

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Definitions:

Physical Units

A basic measure of the quantity of inventory or production without consideration of its stage of completion or value.

Equivalent Units

A concept in cost accounting used to apportion costs to partially completed goods, calculated by taking the number of partially completed units and converting them into a number of equivalent fully completed units.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, incurred to convert raw materials into finished goods.

Total Manufacturing Costs

This encompasses all the direct materials, direct labor, and factory overhead costs involved in producing goods.