ECONOMICS

Detailed explanation-1: -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-2: -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.

Detailed explanation-3: -What is Direct Costing? The Direct Costing method (Marginal costing) is an inventory valuation / costing model that includes only the variable manufacturing costs: direct materials (those materials that become an integral part of a finished product and can be conveniently traced into it)

Detailed explanation-4: -Key Takeaways. Marginal costs are the costs associated with producing an additional unit of output. It is calculated as the change in total production costs divided by the change in the number of units produced. Marginal costs exist when the total cost of production includes variable costs.