For Each of the Following Accounts,indicate What Event Causes the Account

question 179

Essay

For each of the following accounts,indicate what event causes the account to increase and to decrease.The answer is not debit or credit.
$$\begin{array} { | l | l | l | } \hline \text { Account } & \text { Is increased by: } & \text { Is decreased by: } \\\hline \text { Raw Materials } & & \\\text { Inventory } & & \\\hline \text { Work-in-Process } & & \\\text { Inventory } & & \\\hline \text { Finished Goods } & & \\\text { Inventory } & & \\\hline \text { Cost of Goods Sold } & & \\\hline\end{array}$$

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Definitions:

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor directly involved in creating a product.

Advertising Spending

The amount of money a company uses for its advertising efforts to promote its products or services.

Contribution Margin

Contribution Margin is the difference between sales revenue and variable costs of production, indicating how much revenue contributes to fixed costs and profit.

Contribution Format

A financial reporting format that highlights the contribution margin, used primarily in internal decision-making processes.