What Is Need For Marginal Costing?

1.	What Is Need For Marginal Costing?
Answer» Variable cost per unit remains constant; any increase or decrease in PRODUCTION CHANGES the total cost of output. Total fixed cost remains unchanged up to a certain LEVEL of production and does not VARY with increase or decrease in production. It means the fixed cost remains constant in terms of total cost. Fixed expenses EXCLUDE from the total cost in marginal costing technique and provide us the same cost per unit up to a certain level of production.

Answer»

Variable cost per unit remains constant; any increase or decrease in PRODUCTION CHANGES the total cost of output.
Total fixed cost remains unchanged up to a certain LEVEL of production and does not VARY with increase or decrease in production. It means the fixed cost remains constant in terms of total cost.
Fixed expenses EXCLUDE from the total cost in marginal costing technique and provide us the same cost per unit up to a certain level of production.

Discussion