Define the term Marginal Costing ?
Define the term Marginal Costing ?
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nadeem
The Institute of Cost and Management Accountants’ publication A Report on Marginal Costing’ defines Marginal Costing: “The ascertainment, by differentiating between the fixed costs and variable cost, of marginal costs and of the effect on profit of changes in volume or type of output.”
The phrase marginal cost refers to the extra cost of generating an additional unit of output, which may be calculated using the total variable cost given to one unit.
The marginal cost, or variable cost, is charged to units of cost, whereas the fixed cost for the time is entirely written off against the contribution.