Marginal Costing – Dani Ki Costing – CA IPCC Video Lectures


Marginal Costing – Dani Ki Costing 
– CA IPCC Video Lectures

Marginal Costing – Dani Ki Costing – CA IPCC Video Lectures | Marginal Costing – Dani Ki Costing – CA IPCC Video Lectures | Marginal Costing – Dani Ki Costing – CA IPCC Video Lectures | Marginal Costing – Dani Ki Costing – CA IPCC Video Lectures

Back to IPCC Video Lecture Index

Dani Ki Costing
IPCC Video Lectures
Marginal Costing
Lecture 1
Lecture 2

Lecture 3

The End

Back to IPCC Video Lecture Index

Marginal Costing

Marginal Cost is change in the cost due to change in the volume of output. In simple words marginal cost is increase in variable cost on increase of unit of output as compared to the basic units. Variable cost is calculated by aggregating the costs of direct material, Direct Labor, Direct Expenses and Variable Overheard. Marginal cost can be calculated for a single article, a batch, an order or stage of product.
While calculating marginal cost, all the cost elements are classified into fixed and variable cost. The profitability in case of marginal costing is determined with reference to their contribution margin. Marginal costing is a common method and not a distinct method. Marginal costing ascertains costs on the basis of the nature of the cost. Marginal Costing is helpful in decision making process.
In marginal costing, marginal cost remains constant per unit of output while the fixed cost is fixed for a period. Thus marginal costing is a simplified pricing policy. Marginal costing is of great significance in showing the realistic profit. It also helps to take the decision regarding how much quantity should be produced so that the cost comes to minimum and the profit derived comes to maximum. It helps in bringing more control over expenditure.
Inspite of such advantages, Marginal costing technique has certain limitations of it. To calculate marginal cost, it is necessary to classify cost as fixed and variable but it is very difficult to classify the same. Marginal costing is based on estimations but many a times it may happen that, nature of certain costs are unidentifiable. In such a case the marginal costing so estimated becomes unrealistic.

Leave a Reply

Your email address will not be published. Required fields are marked *

Tax Finance info © 2016 Frontier Theme