Accounts Unit 2-Marginal Costing

Accounts Unit 2-Marginal Costing

•Marginal Costing focuses on the impact of producing every additional unit on the firm’s costs, revenue and ultimately profit. 

Costing Approach

• •It therefore separates all costs into variable costs and fixed costs including Manufacturing and Non Manufacturing Costs.

  
  

Cost of Goods Manufactured

•The Cost of Goods Manufactured in the Marginal Costing income statement does not include fixed Manufacturing Costs. 

•Product Costs= Direct Materials+ Direct Labour + Variable Manufacturing  Overheads

                                                                

Multiple Choice

Direct Materials -$12,075

Direct Labour - $8,625

Variable Manufacturing Overheads - $3,450

Variable non manufacturing Overheads -$1,725

Fixed Manufacturing Overheads - $2,760

• $24,150

• $26,910

• $20,700

• $12,075