Need for Marginal Costing

Let us see why marginal costing is required:

●      Variable cost per unit remains constant; any increase or decrease in production changes the total cost of output.

●      Total fixed cost remains unchanged up to a certain level of production and does not vary with increase or decrease in production. It means the fixed cost remains constant in terms of total cost.

●      Fixed expenses exclude from the total cost in marginal costing technique and provide us the same cost per unit up to a certain level of production.

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