--%>
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 : Define the term unitary elastic Define

    Define the term unitary elastic.

    		•
  • Q : Process of Automation Automation is the

    Automation is the process of: (1) adapting equipment which is safer for workers to operate. (2) kinetic engineering which smoothes flows of work on an assembly line. (3) scientific management of robotic factories. (4) substituting sophisticated machin

    		•
  • Q : Explain elements of managerial

    Illustrates the elements of managerial economics as a tool for decision making?

    		•
  • Q : Illustrates terms total cost

    Illustrates the terms total cost, average cost and also marginal cost?

    		•
  • Q : Analysis of Costs and Revenue with

    Refer to below figure. Assume that the firm is currently producing Q2units. What occurs if this expands output to Q3units: w) Its profit raises by the size of the vertical distance df. x) this makes less profit. y) this incurs a loss. z) this wil

    		•
  • Q : Strategy probable to make a cartel A

    A strategy probable to make a cartel successful would be for cartel members to: (w) give heterogeneous goods. (x) stagger the amount by that they raise prices. (y) have set enforceable production quotas. (z) keep high prices when several fringe compet

    		•
  • Q : States the term Shift in Demand States

    States the term Shift in Demand?

    		•
  • Q : Supply of labor in a perfectly

    The supply of labor within a perfectly competitive market is: (w) an upward sloping curve. (x) a horizontal line. (y) above the MRC. (z) below the MRC. Hello guys I want your advice. Please recommend some views for

    		•
  • Q : Illustrates the factors affecting

    Illustrates the factors affecting Demand Forecasting?

    		•
  • Q : Decline in consumer demand A decline

    A decline within consumer demand for a good tends to reduce demands for: (w) inferior goods. (x) alternative products. (y) resources producing the good. (z) union wage increases. Hey friends please give your opinio

    		•