--%>
Assignment Help - homework help

Limitations of Marginal Costing

Write down the limitations of Marginal Costing?

E

Expert

Verified

Limitations of Marginal Costing are illustrated below:

- The categorization of total costs into variable and fixed cost is hard.

- In this method fixed costs are completely eliminated for the valuation of inventory of finished and semi-finished goods. Such removal affects the profitability adversely.

- In marginal costing historical data is employed while management decisions are related to prospect events.

- It doesn’t give any standard for the valuation of performance.

- Selling price fixed on the base of marginal cost will be useful only for short period.

- Estimation of profitability on the marginal cost base can be employed only in the short period.

   Related Questions in Managerial Economics

  • Q : Physical Productivity of labor Labor’s

    Labor’s physical productivity based most directly on technology and the: (w) tastes and preferences of consumers. (x) transactions demand for money. (y) prices and availability of the other resources. (z) level of per capita income.

  • Q : Spencer and Sieglemans definition of

    What is Spencer and Siegleman’s definition of Managerial economics?

    		•
  • Q : Quantity demand declines back and up in

    Suppose that the auto market started at the intersection of S0 and D0, and subsequently higher labor costs drove up prices for latest cars. How will it influence the market for automobiles?: (w) Higher wages for auto workers drive up the total ma

    		•
  • Q : Illustrates the relatively elastic

    Illustrates the relatively elastic demand?

    		•
  • Q : Costs of investing within human capital

    The costs of investing within human capital are probably to be borne by the employee when human capital a worker obtains “on the job” is: (1) general. (2) marginal. (3) precise. (4) generic. (5) specific.

    Q : Backward Bending Labor Supplies The

    The graph for the supply of labor might be backward bending since: (w) the substitution effect surpasses the income effect at specific wages. (x) overtime workers receive pay for time and a half. (y) the substitution effect. (z) the income effect is m

    		•
  • Q : Decrement of supply and demand for a

    When both supply and demand for a good reduce, this is certain that: (w) market price will rise. (x) equilibrium quantity will reduce. (y) quality of the good will decline. (z) level of consumer satisfaction will increase. I need a

    		•
  • Q : Trade types of cycle distinguished by

    What are the trade types of cycle distinguished by Schumpeter?

    		•
  • Q : Differentiates between short run and

    Differentiates between short run and long run costs?

    		•
  • Q : Economic incidence of a tax imposing

    The economic incidence of a tax: (i) identical to its legal incidence. (ii) either forward-shifted to suppliers or backward-shifted to consumers. (iii) imposed on whoever suffers decreased purchasing power because of the tax. (iv) more easily found th

    		•