Ac505 Benetton Case Study Final

1) The formats of the 2004 Benetton income contestations shown on pages 33 and 50 of their 2004 Annual Report atomic number 18 as follows. The most important distinction is that the income statement on page 33 is presented in the contribution nest format, see that on page 55 is presented in the traditional operative approach format. Essentially, the contribution approach divides comprises between those that argon insecure (pre-contribution allowance account) and those which are fixed, with respect to activity. In contrast, the traditional approach separates be by their source (operational areas), e.g. production, administration, sales etc., regardless of whether they are inconstant or fixed. The contribution approach is particularly blue-chip as a management tool for planning, control and decision-making connect to internal activities. Although statements in this format can be presented in pecuniary reports outside the compa ny, they are not intended or received as substitutes for traditional format financial statements in submissions to the governing body because they are not consistent with the formalities of chiefly accepted Accounting Principles (GAAP). The expenses shown on page 50 that step before to have been reclassified as variable selling costs on page 33 are Distribution and transport (€29,988,000) and piggy sales commission (€73,573,000). These appear to be the ones reclassified because: (1) they are twain variable costs; (2) they add up to €103,561,000, almost merely (rounding wrongdoing only) €104,000,000; and (3) Selling, general and administrative expenses of €539,797,000 (on page 50) is almost just now €104,000,000 greater than General and administrative expenses of €436,000,000 (on page 33). 2) Cost of gross sales is include in the computation of contribution mar gin in the statement on page 33 because the ! contribution margin emphasizes cost behavior and the Cost of Sales is characteristic of a...If you privation to sign up a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper