Marginal Costing Homework Help

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What is Marginal Cost?

One of the most important cost concept to learn in business studies is marginal cost. Marginal cost is usually a type of cost that occurs when there is an increase or decrease in the lump sum cost a business incurs. These costs can be varied by producing more number of units or products or serving more number of customers. Mainly when the quantity of product is increased by one, the marginal cost is said to be shifted. In this marginal costing homework help article, we discuss its features, requirements and other aspects.

Need of Marginal Cost

The following points written by our marginal costing homework help article writers hereby define the factors that make marginal cost come into existence.

1. Per unit variable cost does not change and stays constant. The total cost of output is certainly changed by any variance in production.

2. The fixed costs are also remained unchanged in the terms of total cost.

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Features of Marginal Cost

As per our marginal costing homework help article, the following features define marginal cost at its best

1. It defines the relationship between variable cost and volume of production. Usually it’s the impact of the former over the later.
2. Marginal costing includes the analysis of breakeven point.
3. The whole product or department contributes towards the growth of marginal cost.
4. Variable cost plus profit to contribution is equal to the selling price of the product.
The valuation of stock of the finished product is done on the basis of marginal cost.

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