Limitations of Marginal Costing
Write down the limitations of Marginal Costing?
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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.
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An apparent monopoly might charge the competitive price in the long run when: (w) exit is costly. (x) entry and exit are relatively costless. (y) this is not a natural monopoly. (z) this is not regulated. Q : Signaling and Screening Problem Assume Assume that you view a degree as a ticket to a high-paying job along with prospects of quick promotion, and that accumulating human capital by learning and studying valuable material is largely not relevant. Your perception is which a college degree f
Assume that you view a degree as a ticket to a high-paying job along with prospects of quick promotion, and that accumulating human capital by learning and studying valuable material is largely not relevant. Your perception is which a college degree f
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