--%>

Concept of marginal costing

In what condition the concept of marginal costing basically applied?

E

Expert

Verified

The concept of marginal costing is basically applied in the subsequent condition:

- Estimation of Performance: The Estimation of the performance of different departments or products can be measured with the aid of marginal costing that is depends on contribution generating capacity.

- Profit Planning: This method throughout the computation of P/V Ratio aids the management to plan the activities in such a manner that the profit can be maximized.

- Fixation of Selling Price: The method of marginal costing aids the management to fix the price in such a manner so that prices fixed can cover no less than the variable cost.

- Make or Buy decision: Marginal cost analysis aids the management in buying or making decision.

- Optimizing Product Mix: To maximize profits and raise sales volume it is essential to decide an optimized mix or proportion in that different product of a company can be sold.

- Cost Control: Marginal Costing is a method of cost categorization and cost arrangement that facilitate the management to focus on the controllable costs.

- Flexible Budget preparation: As the marginal costing mainly categorizes costs as fixed and variable costs that provides the preparation of flexible budgets.

   Related Questions in Managerial Economics

  • Q : Negatively bending Labor Supplies An

    An individual’s labor supply curve is negatively sloped that is backward-bending into a range of wages while the: (i) demand for goods exceeds the demand for leisure. (ii) worker offers more hours of labor while the wage rate in

  • Q : More Labor productivity American

    American workers tend to be more productive than counterparts of their in South America or Asia into part since they have: (1) superior natural genetic endowments. (2) access to better sports programming, that promotes teamwork. (3) more capital to work with, and supe

  • Q : PROFIT THEORIES OF ECONOMICS I HAVE A

    I HAVE A PROBLEM ANSWERING A QUESTION:'REVIEW THE ECONOMIC THEORIES OF ECONOMICS'

  • Q : Market equlibrium challenges of

    challenges of Equilibrium picing in devloping countries

  • Q : Elasticity of the Supply of Labor of

    This supply of labor worker is roughly unitarily wage elastic as the wage rate increases from: (1) $5 per hour to $10 per hour. (2) $5 per hour to $25 per hour. (3) $10 per hour to $25 per hour. (4) $10 per hour to $40 per hour. (5) $25.01 per hour to

  • Q : Amount of labor by hiring All firms

    All firms maximize profit through hiring the amount of labor where: (w) w = MRC. (x) MRP = VMP. (y) MRC = MRP. (z) MPP = MRP. I need a good answer on the topic of Economics problems. Please give me

  • Q : Labor demand increases and supply

    Wages tend to increase while labor demand: (w) and supply both decrease. (x) decreases and supply increases. (y) and supply both raise. (z) increases and supply decreases. Please choose the right answer from above.

  • Q : Explain the decision making areas of

    Explain the decision making areas of the decision making.

  • Q : What are the scopes of managerial

    What are the scopes of managerial economics?

  • Q : Income Effects and Substitution Effects

    When the substitution effect of a higher wage rate is more powerful than the income effect, in that case the: (1) supply curve of labor will be positively sloped. (2) demand for leisure increases as income rises. (3) human capital eff