ECONOMICS

Detailed explanation-1: -In economics, the marginal cost is the change in total production cost that comes from making or producing one additional unit. To calculate marginal cost, divide the change in production costs by the change in quantity.

Detailed explanation-2: -To calculate total cost, you simply take the sum of all marginal cost at each output level up to the point you you are looking and add it to fixed cost. This works because the sum of marginal cost up to an output level is equal to variable costs and when added to fixed cost, we get total costs.

Detailed explanation-3: -Under marginal costing, the value of finished goods and work–in–progress is also comprised only of marginal costs. Variable selling and distribution are excluded for valuing these inventories. Fixed costs are not considered for valuation of closing stock of finished goods and closing WIP. 4.

Detailed explanation-4: -Marginal cost is the expense incurred by a business for producing an additional unit of a good or service. It is calculated by taking the total cost of producing additional products and dividing it by the total number of extra units produced.