COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Marginal cost
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Marginal Revenue
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Profit
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Marginal Profit
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Detailed explanation-1: -Marginal revenue is the rate of total revenue. The slope of total revenue is determined by the marginal revenue. That is why when MR is constant, Tr increases at a constant rate and when MR starts decreasing then the total revenue increases at a decreasing rate and when MR becomes negative then the TR starts falling.
Detailed explanation-2: -Answers. (i) An increase in Total Revenue at a diminishing rate or a decrease in Total Revenue will result from decrease in Marginal Revenue.
Detailed explanation-3: -To calculate marginal revenue, you take the total change in revenue and then divide that by the change in the number of units sold. The marginal revenue formula is: marginal revenue = change in total revenue/change in output.