In a Throughput Costing Income Statement, the Throughput Contribution Is

question 77

True/False

In a throughput costing income statement, the throughput contribution is calculated as revenues - direct materials costs.

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Definitions:

Sales

Revenue generated from the selling of goods or services within a specific period.

Equity Multiplier

A financial leverage ratio that measures the proportion of a company's assets that are financed by shareholder's equity.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest obligations, calculated as earnings before interest and taxes (EBIT) divided by interest expenses.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected in its income statement.