After reading this article you will learn about Differential Cost:- 1. Meaning of Differential Cost 2. Determination of Differential Cost 3. Essential Features 4. Managerial Applications. Meaning of Differential Cost: Differential costs are the increase or decrease in total costs that result from producing additional or fewer units or from the adoption of an alternative course of action. The alternative [...]
In this article we will discus about the meaning and characteristics of differential cost. Meaning of Differential Cost: Differential cost is the change in the costs which may take place due to increase or decrease in output change in sales volume, alternate method of production, make or buy decisions, change in product mix etc. So, differential cost is the result [...]
The following points highlight the top seven practical applications of differential cost. The practical applications are: 1. Determination of the most Profitable Level of Production and Price 2. Acceptance of Offer at a Lower Price or Offering a Quotation at Lower Selling Price in Order to Increase Capacity 3. Accept or Reject Decisions 4. Make or Buy Decisions 5. Sell [...]