Marginal cost is the additional cost of producing an additional unit. It is nothing but variable cost. It comprises direct materials, direct labour and variable overheads. The C.I.M.A. London has defined marginal cost as - "the amount at any given volume of output by which aggregate costs are changed, if volume of output is increased or decreased by one unit." [...]
Everything you need to know about cost accounting. Cost Accounting is the process of accounting for costs. It begins with the recording of income and expenditure and ends with the preparation of periodical statements. The terms 'Costing' and 'Cost Accounting' are often used interchangeably. But there is a little difference between the two. Costing simply means cost finding by any [...]
Everything you need to know about the key differences between absorption costing and marginal costing. Absorption costing is a total cost technique in which total cost (i.e., fixed and variable) are charged to products. It is often argued that absorption costing is an orthodox or traditional method and that marginal costing is the correct technique. Marginal costing differs from absorption [...]