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 [...]
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 [...]
After reading this article you will learn about the Similarities and Dissimilarities between Differential Cost Analysis and Marginal Costing. Similarities: Most often, marginal costing and differential costing are used as synonymous. But the two are not exactly the same in all respects. The points of similarity and difference between the two are summarised as follows: 1. Both the differential cost [...]