ECONOMICS

COST ACCOUNTING

INTRODUCTION TO COST ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which one of the following is not treated as a method of costing?
A
Job costing & Operating costing
B
Batch costing & Contract costing
C
Marginal costing & Absorption costing
D
Process costing & Unit costing
Explanation: 

Detailed explanation-1: -Marginal Costing is not a method of costing like process, batch or contract costing.

Detailed explanation-2: -When valuing the finished goods and work in progress, only variable costs are taken into account but the variable selling and distribution overheads are not included in the valuation of inventory. It is calculated as Marginal cost = Direct Material + Direct Labour + Direct Expenses + Variable Overheads.

Detailed explanation-3: -Definition: Marginal Costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to units of cost, while the fixed cost for the period is completely written off against the contribution.

Detailed explanation-4: -Solution(By Examveda Team) All factors, except one, are variable is NOT the assumption of the Marginal Productivity Theory of Distribution.

Detailed explanation-5: -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.

There is 1 question to complete.