ECONOMICS

Detailed explanation-1: -Marginal cost is only variable cost, it does not include fixed cost. Because, marginal cost is additional cost and additional cost cannot be fixed cost.

Detailed explanation-2: -Marginal costing is a system in which variable cost are charged to the cost unit and fixed cost of the period is written off in full against the aggregate contribution. Marginal costing provides the information to the management in decision making. This is also known as variable costing.

Detailed explanation-3: -Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving one more customer. It is also known as incremental cost.

Detailed explanation-4: -What is another name for variable cost? Variable cost is sometimes referred to as “unit-level cost” because it varies per unit of output-that is, according to the number of units produced.