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WorksheetsMARGINAL COSTING
Total questions: 10
Worksheet time: 5mins
Marginal Cost of Sale for Product consist of
Direct materials + Direct labor + Direct expenses + Variable production
overhead
Direct materials + Direct labor + Direct expenses + Fixed production
overhead
Direct materials + Direct labor + Direct expenses + Variable production overhead + Other variable overhead
Direct materials + Direct labor + Direct expenses + Variable production overhead + Other fixed overhead
Statement:
marginal cost of a product is its fixed cost
TRUE
FALSE
Formula to calculate contribution margin
SALES – VARIABLE COSTS
SALES – VARIABLE COSTS - FIXED COST
SALES – PERIOD COSTS
SALES – COGS
This is the advantages using marginal costing, EXCEPT
Marginal costing provides useful information for decision making
There is under/over-absorption of overheads with marginal costing
It is easy to account for fixed overheads using marginal costing
Profit occure, when
fixed cost > contribution margin
fixed cost < contribution margin
variable cost > contribution margin
variable cost < contribution margin
Information: Direct materials $15, direct labor $10, variable overhead $20, variable
selling and distribution cost $15, Total fixed cost $35, Sales $120
Calculate Variable Production Cost of Sales!
$25
$45
$30
$60
Information: Direct materials $15, direct labor $10, variable overhead $20, variable
selling and distribution cost $15, Total fixed cost $35, Sales $120
Calculate Variable Cost of Sales!
$25
$45
$30
$60
Information: Direct materials $15, direct labor $10, variable overhead $20, variable
selling and distribution cost $15, Total fixed cost $35, Sales $120
Calculate Contribution Margin!
$25
$45
$30
$60
Information: Direct materials $15, direct labor $10, variable overhead $20, variable
selling and distribution cost $15, Total fixed cost $35, Sales $120
Calculate Profit!
$25
$45
$30
$60
Information: Variable cost product $7, fixed cost $3, sell product $11.
Calculate contribution per unit!
$1
$8
$4
$7
