In this article we will discuss about:- 1. Meaning of Marginal Costing 2. Contribution of Marginal Costing 3. Features of Marginal Costing 4. Arguments in Favour of Marginal Costing 5. Criticism against Marginal Costing 6. Absorption Costing and Marginal Costing: Impact on Profit. Meaning of Marginal Costing: Marginal costing is a principle whereby variable costs are charged to cost units [...]
This article throws light upon the ten major managerial problems in application of marginal costing. The problems are: 1. Pricing Decisions 2. Profit Planning and Maintaining a Desired Level of Profit 3. Make or Buy Decisions 4. Problem of Key 5. Selection of a Suitable or Profitable Sales Mix 6. Effect of Changes in Sales Price 7. Alternative Methods of [...]
After reading this article you will learn about Profit-Volume Ratio. The Profit/volume ratio, which is also called the 'contribution ratio' or 'marginal ratio', expresses the relation of contribution to sales and can be expressed as under: P/V Ratio = Contribution/Sales Since Contribution = Sales – Variable Cost = Fixed Cost + Profit, P/V ratio can also be expressed as: P/V [...]