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In financial accounting the financial transactions are recorded, analyzed and summarized. The transactions are summarized as assets, incomes, liabilities and expenses, where as in marginal accounting we have to analyze them more for better cost decisions. We further divide our expenses into variable and fixed cost. The difference between fixed and contribution cost will be net profit. In financial accounting, net profit is calculated on the basis of long run. Revenue expenses are taken into consideration for calculating net profit.
Net profit = Total revenue - Revenue expenditures
All capital expenditures are also fixed cost however they are not deducted in income statement.
Marginal accounting is vital for cost volume profit analysis. Fixed cost will be fixed at every level of output; however variable cost will change due to changing in output. Hence, contribution is calculated at different level of output.
Financial accounting gives us the income statement and balance sheet. Further decisions are taken by the interested parties. Marginal cost calculation lets you arrive at the price to purchase/produce one more items. It is defined as the change in cost divided by the change in unit of production. Once this is calculated, if the result is lower than the current price of the item, it leads to cutting prices to sell more.