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Acme Company
Balance Sheet
As of January 5, 2021
(amounts in thousands)
Cash 14,700 Accounts Payable 2,400
Accounts Receivable 4,800 Debt 3,700
Inventory 3,800 Other Liabilities 5,000
Property Plant & Equipment 15,800 Total Liabilities 11,100
Other Assets 900 Paid-In Capital 6,000
Retained Earnings 22,900
Total Equity 28,900
Total Assets 40,000 Total Liabilities & Equity 40,000
Update the balance sheet above to reflect the transactions below, which occur on January 6, 2021
1. Receive payment of $12,000 owed by a customer
2. Buy $15,000 worth of manufacturing supplies on credit
3. Purchase equipment for $44,000 in cash
4. Issue $80,000 in stock
5. Pay $4,000 owed to a supplier
6. Borrow $58,000 from a bank
7. Buy $15,000 worth of manufacturing supplies on credit
What is the final amount in Accounts Payable?

Answers

Answer 1

According to the question, the final amount in accounts payable of balance sheet is $21,400.

What is balance sheet?
A balance sheet is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. It is used to gain insight into the financial strength of a company. Balance sheets show a company's total assets, liabilities, and equity. Assets are everything a company owns, such as cash, accounts receivable, inventory, and property. Liabilities are amounts owed to creditors, such as accounts payable, debt, and payroll liabilities.

This is because the Accounts Payable amount of $2,400 is increased by the second transaction of buying $15,000 worth of manufacturing supplies on credit and decreased by the fifth transaction of paying $4,000 owed to a supplier.  Thus, the Accounts Payable balance is $2,400 + $15,000 - $4,000 = $21,400.

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Related Questions

The intent of the offeror to extend a serious offer to the offeree is typically determined by reference to O A.The beliefs of the offeror. O B. The intentions of the offeror. O C. The assumptions of the offeror. O D. The words and conduct of the offeror.

Answers

The intent of the offeror to extend a serious offer to the offeree is typically determined by reference to D. The words and conduct of the offeror.

The words and actions of the offeror are often used to establish whether or not the offeror intends to make a firm offer to the offeree. Both the offering and the confirmation must be made in a straightforward manner.

The offeror should intend to submit the offer in order for it to be valid. From the perspective of the offeree, it is determined whether there is an intention to make an offer. It is an offer if the words or deeds of the offeror would convince a rational person in the offeree's situation that it is an offer.

A manifestation of acquiescence to the conditions [of the offer] given by the offeree in a way that is invited or demanded by the offer is referred to as an acceptance. Identifying whether an offeree accepts a proposal.

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In computing the realized gain in a like-kind exchange, it is necessary to compare A) the fair market value of the assets received with the adjusted basis of the assets given up. B) the adjusted basis of the assets received with the fair market value of the assets given up. C) the fair market value of the assets received with the fair market value of the assets given up. D) the adjusted basis of the assets received with the adjusted basis of the assets given up.

Answers

The correct answer to the question is Option A- the fair market value of the assets received with the adjusted basis of the assets given up.

What is Fair market value?

A product's fair market value, or FMV, is the price it would fetch on the open market if both parties were given a reasonable amount of time to complete the transaction, were acting in their own best interests, and were not under undue pressure.

Typically, the average of three or more homes that are comparable is used to determine the home's fair market value. A popular method for determining a home's fair market value, or the price a buyer is willing to pay in a given market, is the comps strategy.

The fair market value of a property is decided by both the buyer and the seller. The real estate transactions that take place within a community are looked at by the appraiser or assessor, who then determines the factors that influence the final sale prices.

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Iris Rosales is an unmarried college student age 21, and is claimed as a dependent on her married parents' tax return. What is the maximum number of personal exemptions Iris can legally claim on her own tax return

Answers

Zero is the maximum number of personal exemptions Iris can legally claim on her own tax return ,

Individuals may file an amended tax return (Form 1040X) within three (3) years of the original return's filing date or within two (2) years of the date the tax was paid, whichever is later. An original return filed early is considered filed on the return's due date.

Funeral or burial expenses, nonprescription drugs, toothpaste, toiletries, cosmetics, a trip or program for general health improvement, or most cosmetic surgery are not deductible. You cannot deduct money spent on nicotine gum or patches that do not require a prescription.

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Many people use mobile apps and online software to manage and create personalized budgets. Suppose your task is to develop an online tool for personal budgeting. What information would be included or entered

Answers

The common information of the budget software are:

Income FlowAccount detailsNameFrequent billsBudgetExpense

From the inquiry, we comprehend that the utilization of the product is to oversee and make customized budget

The normal data of most  budget software are:

Pay Stream

Account subtleties

Name

Continuous bills

Financial plan

Cost

There are a few other data, but the above addresses the normal data the device would have.

rom the inquiry, we comprehend that the utilization of the product is to oversee and make customized spending plans

The normal elements of most  budget software are:

Custom reports

Make financial plan

Cost following

Spending limit

Cautions (SMS as well as Email)

Bills installments

Needs and Needs

Monetary status

There are a few different highlights, but the above addresses the kinds of elements the device would have

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Which of the following is NOT considered to be an operating expense on the income statement? A) salaries B) depreciation and amortization
C) corporate taxes D) administrative expenses and overhead

Answers

On the income statement, corporate taxes are not considered an operating expense.

What is indirect corporate taxation?

Corporate tax, also known as corporation tax, is a type of direct tax. Any earnings generated by a corporation's operations, whether domestic or international, are subject to corporate taxation. Corporations pay rates ranging from 15% to 40%.

Customers pay indirect taxes whenever they buy goods and services, as opposed to paying direct taxes like income tax or corporate tax to the government.

The term corporate/corporation tax refers to a direct tax levied by the government on business organizations as a source of revenue. In order to comply with laws, a company compiles its financial statements for an accounting period (usually 12 months).

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What are the 3 big questions of economics?

Answers

Scholars will read and take notes on the three main questions of economics. These are what to produce, how to produce it, and who to produce it for.  

The generalities of failure, choice, and occasion cost are at the heart of economics. A good is scarce if the choice of one volition requires that another be given up. The actuality of indispensable uses forces us to make choices.  Since coffers are scarce, society must determine which goods it'll produce and what amounts.

The product possibilities wind stylish illustrate this question. The wind shows all of the possible product combinations in society for economics. There are three main types of profitable systems command,  request, and mixed.

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What are 5 scarce resources?

Answers

The five scarce resources are fresh water, fossil fuels, land, minerals and biodiversity.

Scarce resources are those that are present in limited amounts.

1. Fresh water: While two-thirds of the Earth's surface is covered in water, only 2.5% of it is fresh water. This means that the majority of the world's population struggles to access safe and clean drinking water.

2. Fossil fuels: Fossil fuels, such as oil and gas, are finite resources. This means that as the demand for these resources increases, the supply decreases and prices increase.

3. Land: With an increasing human population, the demand for land is greater than ever. The availability of land suitable for farming, building, and other uses is limited, making it a valuable and scarce resource.

4. Minerals: Minerals are essential for modern life, and are used in everything from electronics to medicines. Many minerals are scarce and difficult to extract, meaning that their supply is limited and their prices can be high.

5. Biodiversity: Biodiversity is the variety of plant and animal species that inhabit our planet. As habitats are destroyed, species become extinct and biodiversity is lost forever. This can reduce the resources available to humans and other species, making it a precious and rare resource.

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A forecast with a time horizon of about 3 months to 3 years is typically called a: A)short-range forecast. B)medium-range forecast. C)long-range forecast D)weather forecast. E)strategic forecast.

Answers

A forecast with a time horizon of about 3 months to 3 years is typically called a A)short-range forecast.

Short-term forecasting is the process of projecting what will happen in the near future (usually hour by hour) and then using that information to construct a strategy to fulfill those demands.

Let's use your support crew as an example. You may already have forecasts on a monthly, weekly, or even daily basis. However, Short Term Forecasting goes much farther in order to assist you manage a staff that is as efficient and productive as possible.

For example, your current prediction shows that next week will have a high volume of client engagement. That's a good place to start, but it's still not enough information to properly staff.

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the size of the underground economy would tend to decrease if the government of a country ___

Answers

The size of the underground economy would tend to decrease if the government of a country decreased government regulations on businesses.

What is the underground economy?

The term "underground economy" refers to economic activities that are thought to be illegal, either because they include the exchange of illegal products or services or because they don't follow the rules for government reporting. The shadow economy, black market, or informal economy are terms used to describe the underground economy.

It is challenging to determine the size of underground economies because, by their very nature, they are not subject to governmental control; as a result, the economic activity neither generates tax returns nor appears in official statistical reports. However, even though the transactions are hidden, keeping track of outgoing expenses can provide a sense of statistics. In other words, spending that is not reflected in documented transactions presumably reflects the scope of black market activities.

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How do you state your opinion in an argumentative essay?

Answers

In contrast to personal opinion or cultural or religious mores, the argument supporting the thesis of an argumentative essay should be one that can be backed up by data and proof.

A statement or set of statements called premises constitutes an argument, which is used to assess the plausibility or acceptability of a conclusion. The three primary perspectives from which arguments can be examined are logical, dialectical, and rhetorical. Any group of propositions that one is claimed to follow from the others through deductively valid inferences that preserve truth from the premises to the conclusion can be referred to as an argument in logic. An argument in logic is often expressed in a symbolic formal language rather than in everyday English. This logical point of view on argument applies to scientific disciplines like computer science and mathematics. Logic is the study of the different types of reasoning used in arguments as well as the creation of rules and criteria for judging arguments. Both valid and sound deductive arguments can be made: in a valid argument, the premises must support the conclusion, even if one or more of the premises are incorrect and the conclusion is wrong; in a good argument, the premises must support the conclusion. In contrast, inductive arguments may be of varying degrees of logical cogency: the stronger or more compelling the argument, the greater the likelihood that the conclusion is correct; the weaker the argument, the lower the likelihood.

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What is a type of mediation that refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness? Multiple Choice disintermediation cybermediation interactivity reintermediation

Answers

Cybermediation is a type of mediation that refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness

According to Cybermediation, an extranet device can be used to restructure organisational relationships between entities and offer proof of the Internet's continual creative destruction of traditional business models. Examples of reintermediation include moving investment funds into secure bank accounts or reintroducing a middleman between a supplier and a customer. This expression, which means the opposite of disintermediation, is frequently used in connection with finance. Reintermediation can mean one of two things: taking money out of circulation Bringing back a middleman

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What are the 3 types of supply in economics?

Answers

There are five different supply kinds. These are market, joint, short-term, long-term, and composite.

What is meant by supply ?

A basic economic notion called supply refers to the total amount of a particular commodity or service that is made available to consumers. When shown as a graph, supply can refer to the quantity that is offered at a particular price or the quantity that is offered over a range of prices.

Supply is a fundamental economic concept that describes the overall quantity of a specific good or service that is made available to buyers. Demand and it are extremely tightly tied to one another. Prices of a given good or service decline as supply outpaces demand.

In economics, supply is described as the entire quantity of a specific good or service that a supplier makes available to customers at a particular time.

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According to the interest parity condition, if the domestic interest rate is 12 percent and the foreign interest rate is 10 percent, then the expected ________ of the foreign currency must be ________ percent. depreciation; 4 appreciation; 2 appreciation; 4 depreciation; 2

Answers

According to the interest parity condition, if the domestic interest rate is 12 percent and the foreign interest rate is 10 percent, then the expected depreciation of the foreign currency must be 2 percent.

Give a brief account on domestic interest rate.

To meet certain economic objectives, a nation frequently adopts monetary policy that affects the country's interest rates. The nation is purposefully influencing the money supply, credit availability, and borrowing costs whether it is trying to spur employment growth or control inflation. As a result, modifications to the country's monetary policy that affect interest rates modify the value of its currency. The value of that nation's currency will vary as a result of an increase or decrease in interest rates, with subsequent effects on the value of the global exchange rate.

The value of a nation's currency typically rises when interest rates are higher. The demand for and value of the domestic currency rises when interest rates are higher because they tend to draw in foreign investment. Lower interest rates, on the other hand, are sometimes unappealing for foreign investment and reduce the currency's relative value.

Hence, option (d) can be considered as relevant.

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promotion and customer support for products and services: generation of power and making it available to people: performing for and sharing information with others: teaching people and supporting learners:

Answers

Promoting items and services and providing customer service sales, marketing, and customer service; Power generation and distribution to the public energy; giving performances and sharing knowledge with others A/V, communication, and the arts Educating others and assisting learners Training and Education.

Describe marketing approach.

A advertising strategy is a plan for attaining a business' objectives through an understanding of client needs and the development of a distinct and long-lasting competitive advantage. It includes everything, from choosing which channels to utilize to contact your customers to figuring out who they are.

How does strategic planning look in practice?

One of the most common examples of strategic planning is a corporate strategy, which tries to increase marketing and brand recognition. Including new goods and quality improvements There are various ways to take advantage of growth prospects, such as using aggressive marketing strategy.

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Why is a mixed economy the most common?

Answers

It is currently the most prevalent type of economy in existence. The majority of the minor developed and emerging nations, in addition to all of those major ones, have mixed economies.

What does the term "developing nations" mean?

A developing country, also known as a less advanced world or an emerging market, has a GDP that is lower than that of developed countries and an economy that is less developed and complex.

What is an illustration of a developing country?

List and Illustrations of Developing Nations. Examples of developing nations that have encountered challenges on their way to becoming fully developed nations include Micronesia, Sudan, and Cambodia.

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if one u.s. dollar equals one e.u. euro, which of these could result if the euro experiences inflation?

Answers

If the value of one US Dollar is equal to that of one EU Euro, then an inflation would be a result of the situation wherein the citizens of the United States purchase more goods from the European Union at lesser monies. Therefore, the option C holds true.

The inflation is usually understood as a concept that leads into increase in the prices of goods in an economy, and thereby leading to a decrease in the purchasing power of the consumers who belong to that economy. The above condition represents the situation of an increase in the rates of inflation in the European Union.

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Complete question

If one U.S. dollar equals one euro, which of these could result if the euro experiences inflation?

E.U. citizens could purchase more goods in the U.S. for less money.

E.U. citizens would purchase large amounts of U.S. stock.

U.S. citizens would purchase more goods from the E.U. for less money.

U.S. citizens would purchase large amounts of E.U. stock.

Answer:

C) U.S. citizens would purchase more goods from the E.U. for less money

Explanation:

I got it right on the test

Business ethics is a part of decision making Question 3 options: made primarily by top management. at all levels of work and management. that is less important than other decision making processes. that stems from individual moral philosophies.

Answers

In business, ethical decision-making is a strategy that prioritizes moral principles as a set of criteria rather than economic considerations in making business decisions.

Laws often guide business ethics, but business ethics can also provide basic guidelines that businesses can follow to gain public recognition.

Business ethics refers to the implementation of good business policies and practices, perhaps in relation to controversial issues.

Issues that arise in ethics discussions include corporate governance, insider trading, bribery, discrimination, social responsibility, and fiduciary duty. Laws typically set the course for business ethics and provide basic guidelines that businesses can follow in order to gain public recognition.

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Which step of PDA, the decision-making process has a driver just taken when he/she determines what will probably happen in a driving situation

Answers

When a driver decides what is likely to occur while driving, they have just completed the evaluate phase of the PDA decision-making process. It is crucial to comprehend how decisions are made.

People will have to make many decisions during their lives, and occasionally when they make decisions without taking many factors into account, the decision turns out to be poor. It may have an adverse effect on many things around and will not improve their life. Process for Making Decisions Step 1: Determine the reasoning for the choice. Gathering information is step two. Step 3: Standards for evaluating alternatives Step 4: Make a list of options and analyse them. Step 5: Reviewing your options Step 6: Pick the most advantageous option. Step 7: Carry out the choice

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What are your top 3 assets?

Answers

The top 3 assets are your time, thought, and network are your three most valuable resources. Your daily goals should be to safeguard your time, expand your thinking, and cultivate your network.

Top-performing salespeople are aware of what this entails and resist the temptation to waste time on pursuits that don't result in sales.

Passion. Being enthusiastic and committed to your job will always be valued qualities in the workplace. Genuine enthusiasm for your work may promote both personal development and career progress. Although it's advantageous to you, it may also increase the success of the business you work for.

Working with others is crucial for cooperation, especially when it comes to being able to appreciate others' differing viewpoints.

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If the market price is $25, the average revenue of selling five units is a. $25. b. $5. c. $12.50 d. $125.

Answers

If the market price for five units is $25, what is the typical profit? Price = Marginal + Average Revenue + 25 dollars. Cost of Fixed Production.

What factors determine marginal revenue?

The additional money made from the sale of an additional unit is known as marginal revenue. Even after a period of constant output, this revenue computation abides by the law of diminishing returns since it becomes slower as output level increases. In a fully competitive market, a company will keep producing goods and services until its total marginal revenue equals its marginal cost.

For instance, a business might offer 100 shirts, each worth $10, for $1,000 on a Monday. This website charges $1,100 for 110 shirts.

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the fourth industrial revolution is where advances in _______ are radically shifting the way we work, live, learn, and interact with each other.

Answers

The fourth industrial revolution is where advances in technology are radically shifting the way we work, live, learn, and interact with each other.

A fundamental shift in the way we live, work, and interact with one another has been brought about by the Fourth Industrial Revolution. With extraordinary technological advancements comparable to those of the first, second, and third industrial revolutions, it is a new chapter in human development.

These developments are fusing the physical, digital, and biological worlds in ways that hold great promise as well as the possibility of great danger. We are being forced to reconsider how nations develop, how businesses create value, and even what it means to be a human due to the speed, breadth, and depth of this revolution.

The Fourth Industrial Revolution is a chance for everyone, including leaders, policymakers, and people from all socioeconomic categories and countries, to leverage convergent technologies to build an inclusive, human-centered future.

It is not simply about technology-driven transformation. The true opportunity is in looking beyond technology and figuring out how to empower as many people as possible to make a difference in their families, organizations, and communities.

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what is selling the rights to place a brand name on products such as t-shirts referred to as?

Answers

It sells the right to put a brand name on products such as T-shirts, which is called license branding.

License means to rent or lease an intangible property. This is the process of creating and managing agreements between trademark owners and companies or individuals wishing to use the trademark in connection with their products for an agreed period of time in an agreed territory. Licenses are used by brand owners to extend their brands or characters to products of a completely different nature.

Examples of intangible assets include songs ("Somewhere Over The Rainbow"), characters (Donald Duck), names (Michael Jordan), and brands (The Ritz-Carlton). Any agreement to license a trademark requires a license agreement. A license agreement authorizes a company that sells products or services (licensee) to lease or rent a trademark from a trademark owner (licensor) that operates a licensing program.

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i am received in january you get me if you are not an employee, but were paid by a company you probably didn’t get taxes withheld if you got me, so you may have a big tax bill coming up

Answers

I received in January you get me if you are not an employee but were paid by a company you probably didn’t get taxes withheld if you got me, so you may have a big tax bill coming up- It is 1099

What is the meaning of tax bill?

We mail SSA-1099 tax forms to Social Security recipients each January. You can use it to calculate how much Social Security income to include on your tax return and report to the Internal Revenue Service by looking at the total benefits you received from us in the previous year. An IRS Form W-2, Wage and Tax Statement, outlining your pay, tips, and other compensation from the previous year, must be given to you by your employer by January 31 of every year, even if you no longer work there.

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________ is a major issue faced by companies when implementing enterprise systems.

Answers

The gap between the requirements of an organization and the capabilities of an application is a major issue faced by companies when implementing enterprise systems.

A need is a distinct, documented operational or physical need that a given design, product, or process seeks to address in product design and optimizations. The product development process' design stages incorporate a set of criteria. Since tests should be able to be traced back to particular requirements, demands are therefore a crucial component of the verification process. The features and functionalities required for the specific project are represented by the objectives. The components are gradually established in tandem with design and execution when iterative or agile software development techniques are employed.

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(Chart A - H2)
Line De represents the current household demand for a specific product. If income taxes are reduced, which line will represent the demand for that specific product?
a. D1
b. De
c. D2

Answers

Option b, The line that represents the current household demand for a specific product is denoted as "De". If income taxes are reduced, this line would continue to represent the demand for that specific product, as the change in taxes would likely affect the quantity demanded rather than the line representing the demand itself.

The line representing the current household demand for a specific product is referred to as "De" in economics. This line represents the relationship between the price of the product and the quantity of the product that households are willing and able to purchase.

When income taxes are reduced, the disposable income of households increases, which can lead to an increase in the quantity demanded of most products. However, the line representing the demand for the product, "De", will remain the same, it will just shift to the right due to the increase in quantity demanded at each price level.

This is known as the law of demand.

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________________ is typically described as the environment or occasion at which a communication transaction occurs.

Answers

The correct option is B.  Context refers to the setting or physical environment in which communication interactions occur, as well as the specific occasion and which and how many participants are present.

Surroundings may be described as a total of all of the dwelling and non-residing factors and their outcomes that influence human existence. whilst all living or biotic elements are animals, flowers, forests, fisheries, and birds, non-residing or abiotic factors consist of water, land, sunlight, rocks, and air.

Human health and well-being are intimately related to the nation of the surroundings. correct excellent herbal environments offer basic desires, in phrases of clean air and water, fertile land for meal manufacturing, and electricity and fabric inputs for manufacturing.

The phrase 'surroundings' is complete. it is derived from the French phrase 'environed' which means that to surround or enclose. for this reason, the phrase surroundings encompass the non-residing additives together with air, water, land, etc.; the dwelling components such as plant life and animals, and their courting with each different.

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Complete Question:

______ refers to the setting or physical environment in which communication interactions occur, as well as the specific occasion and which and how many participants are present.

a). Individual forces

b). Context

c). Societal forces

d). Culture

Cash flows from interest received are reported in the statement of cash flows as part of:
a. operating activities
b. financing activities
c. investing activities
d. non-cash activities
e. none of these as this is not reported in the statement of cash flows

Answers

Cash flows from interest received are reported in the statement of cash flows as part of operating activities.

Option A is correct.

What are the main responsibilities?

A company's operating activities are the tasks that go into making its goods and/or services available to the market. Manufacturing, distributing, marketing, and selling a product or service are examples of the company's core business activities.

Cash Flow from Operating Activities: What Is It (CFO)?

The term "cash flow from operating activities" (CFO) refers to the amount of money a company receives from its regular, ongoing operations, such as manufacturing and selling goods or providing a service to customers.

In the statement of cash flow, what is operating?

Activities carried out: Cash flow activities are those that either record the money spent on producing a product or service or generate revenue. Inventory transactions, interest and tax payments, employee wages, and rent payments are examples of operational business activities.

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When an employee benefits plan pays the premium for a fiduciary liability policy, what provisions must be included in that policy?

Answers

A fiduciary liability policy purchased for an employee benefits plan must include coverage for any legal liability of the employer and plan fiduciaries for any actions taken in the administration of the plan.

This coverage should extend to the reimbursement of defense costs and any judgments or settlements arising from alleged breach of fiduciary duty. The policy should also cover any losses resulting from errors and omissions in the management of plan assets or the selection of service providers.

Additionally, the policy should provide coverage for any losses that may arise from any claims made by plan participants related to the administration of the plan. Finally, the policy should provide coverage for any claims related to the fiduciary’s failure to monitor the plan’s investments and service providers.

Which of the following is an advantage of franchising as a mode of entry into foreign markets?
A. The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.
B. The franchiser is allowed to take profits out of one country to support competitive attacks in another.
C. The franchiser can easily maintain uniform quality across many geographically dispersed franchisees.
D. Manufacturing concerns can be effectively coordinated across adjacent processes.
E. The franchiser can support its short-term interests in a country with an unstable economy

Answers

One benefit of franchising as a method of entry into international markets is that the franchiser is relieved of many of the costs and hazards of launching a foreign market on its own.

What do you know about foreign markets?

Foreign markets refer to investments and trading activities that take place outside of one’s home country. These markets involve buying and selling stocks, bonds, commodities, and other financial instruments in international markets. Foreign markets offer investors the opportunity to diversify their portfolios and gain exposure to a wide range of global markets. Investing in foreign markets can be riskier than domestic investments, due to currency fluctuations, political uncertainty, and lack of liquidity. However, with the right research and due diligence, foreign markets can offer investors greater returns than domestic markets. Furthermore, foreign markets can be used to hedge against volatility in the domestic markets. Investors should research the local laws, regulations, and tax implications before investing in foreign markets.

So, The correct option is A.

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The layout for the flexible budget follows a _____ format.

Answers

The layout for the flexible budget follows a Contribution margin format. An income statement with a contribution margin is one in which all variable costs are subtracted from sales.

Contribution margin income statements are those that reflect the contribution amount that remains after all variable expenditures have been subtracted from the overall revenue amount. To determine the business entity's net profit or loss, additional fixed expenditures are subtracted from the contribution.

Instead of production costs, fixed expenses are included in overhead costs in the Contribution Margin Income Statement style. To put it more simply, fixed expenditures continue to be incurred whether sales volumes are up or down. As a result, they are unaffected by sales figures. However, the variable expenses tend to shoot as the production increases.

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