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  • Applications of Marginal Costing: Presented By, Deepu Naziya

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    Marginal costing is a technique that differentiates between fixed and variable costs. It charges only variable costs to products. The key applications of marginal costing are cost control, profit planning, evaluation of performance, and decision making. Specifically, marginal costing allows management to control fixed costs while lower management controls variable costs. It also helps with profit planning by analyzing how profits change with prices, costs, and sales. Performance evaluation is improved by distinguishing fixed and variable expenses. Finally, marginal costing provides management assistance for important decision making.

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    Application of marginal costing

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    Economics

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    Marginal costing is a technique that differentiates between fixed and variable costs. It charges only variable costs to products. The key applications of marginal costing are cost control, profit planning, evaluation of performance, and decision making. Specifically, marginal costing allows management to control fixed costs while lower management controls variable costs. It also helps with profit planning by analyzing how profits change with prices, costs, and sales. Performance evaluation is improved by distinguishing fixed and variable expenses. Finally, marginal costing provides management assistance for important decision making.

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    8 views8 pages

    Applications of Marginal Costing: Presented By, Deepu Naziya

    Uploaded by

    Nazia Rahiman
    Marginal costing is a technique that differentiates between fixed and variable costs. It charges only variable costs to products. The key applications of marginal costing are cost control, profit planning, evaluation of performance, and decision making. Specifically, marginal costing allows management to control fixed costs while lower management controls variable costs. It also helps with profit planning by analyzing how profits change with prices, costs, and sales. Performance evaluation is improved by distinguishing fixed and variable expenses. Finally, marginal costing provides management assistance for important decision making.

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    Applications of Marginal Costing

    Presented By, Deepu Naziya

    MARGINAL COSTING

    Marginal costing is a technique whereby marginal costs are ascertained. It is a technique of costing which differentiates between fixed costs and variable costs, and charging only variable costs to products.

    APPLICATIONS OF MARGINAL COSTING


    COST CONTROL PROFIT PLANNING EVALUATION OF PERFORMANCE DECISION MAKING

    Applications
    1.Cost control Marginal costing divides the total cost into fixed and variable cost. Fixed cost can be controlled by the top management. Variable cost can be controlled by the lower level management. Marginal costing by concentrating all efforts on the variable cost can control.

    2.Profit planning Marginal costing helps the profit planning. Planning for future operations maximizes the profits. Profits are increased or decreased as a consequences of fluctuation in selling prices, variable costs and sales quantities.

    3.Evaluation of performance Marginal cost analysis is very useful for evaluating the performance. Performance evaluation is better done if distinction is made between fixed and variable expenses.

    4.Decision making Marginal costing technique is used in providing assistance to the management in vital decision making.

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