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Hi
Is traditional contribution analysis another phrase for absorption costing?
Thanks
No – not at all.
Absorption costing is when the fixed overheads are included in the cost per unit.
Contribution analysis is working on the contribution, which is the selling price less the variable costs (or profit before fixed costs – same thing).
Thank you.
I have a question which im not sure how to answer.
Calculate the mix (units) of products a and b which will maximise net profit and the value of that net profit using throughput accounting contribution analysis?
Does this require you to calculate the return per factory hour and the cost per factory hour?
Thanks
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