Where the situation involved changes in fixed cost, a more fundamental and to decision making called differential costing is used.
Fixed cost is a cost that accrues in relation to the passage of time and which, within certain output and turnover limits, tends to be unaffected by fluctuations in the level of activity. This is the central point in marginal costing. Contribution is the different between sales value an the variable cost of those sales expressed either in absolute terms or as a contribution per unit.
Therefore the increase in profit will equal the sales value less variable cost of the product, that is the amount of contribution carried from the sales of the item. It output or productively is to be enhanced, and profit maximized, a knowledge of cost behaviour and analysis into the various components is essential and worth undertaking.
The classification of costs into fixed and variable components makes the job of cost ascertainment easier.
This could be achieved through? When the contribution per unit is expressed as the different between the selling price and its marginal cost. It is treated as period cost and are charged in full to the profit and loss account of the accounting period which they are incurred.
It has employed in the early part of this century, particularly by the famous economist Alfred Marshall. Where there is decision with no changes in fixed cost, normal marginal costing principles apply. Also the personal observation methods were used, together with relevant information from libraries.
Marginal costing cannot be used without calculating the contribution. Modern management is faced with a number of decision-making problems every day. However, it is likely that differences between the two view points are more apparent than real.
Even semi-variable costs have to be bifurcated into their fixed and variable components based on the variability criterion. The study will critically examine the following: The study is meant to investigate and then find solutions to the problems that are faced using the technique. Despite its superiority over absorption costing, the marginal costing technique has its own limitations.
To determine the condition for cost control and analysis 4. Marginal costing distinguishes between fixed costs and variable costs. The research work is a real attempt to investigate into the principle and practice of marginal costing as an essential tool for decision-making in Manufacturing Companies using Anambra Motor Manufacturing Company ANAMMCO as a case study.
Faraz Hussain from University of Abuja said "This is a great help for those who seek education. Fixed cost is a cost that accrues in relation to the passage of time and which, within certain output and turnover limits, tends to be unaffected by fluctuations in the level of activity.
This study will tests the following hypothesis and then use the result to arrive at the answers. The differences of view point regarding marginal cost per unit results in the above alternative views of a firms total cost structure. The concept is known as the addition or incremental cost of producing extra one unit of a product.
Accordingly, marginal cost, variable cost and direct cost are used interchangeably. The study will critically examine the following: Fixed overheads are Rs. With this technique of marginal costing can production not be increase without increasing the amount of fixed cost?
E Banister and P. The company is located at Emene Industrial layout, Enugu. Absorption costing is therefore misleading, since it is more appropriate to deduct fixed cost from total contribution for the period to derive a profit figure.
Costing is firstly, the technique of ascertaining costs. Marginal costing technique is not determines the profit of an organization. The marginal cost of a unit of production will involved the direct material, labour and expenses to make that unit, and since each unit will require the same regardless of the number of units produced.While making a pricing decision under Special price, if price is greater than marginal cost, a) Acceptance and rejection depends on product type b) Order should be rejected.
Decision making tool The decision making tool for this study is the ‘SWOT analysis’. The process will involve a critical analysis of the strengths, weaknesses, opportunities and threats that Mark has on. this research study titled ''marginal costing as a tool for management decision making'' contains concise and needed material.
Abstract. The project titled “marginal costing as a tool for management decision making” a case study of ANAMMCO Ltd Enugu, was undertaking to evaluate marginal costing techniques to wards ascertaining its efficiency and effectiveness.
MARGINAL COSTING AS A TOOL FOR MANAGEMENT DECISION MAKING. (A CASE STUDY OF ANAMMCO LTD ENUGU) Abstract. The project titled “marginal costing as a tool for management decision making” a case study of ANAMMCO Ltd Enugu, was undertaking to evaluate marginal costing techniques to wards ascertaining its efficiency and effectiveness.
Marginal Costing Technique As A Tool For Management Decision Making. ABSTRACT This research was aimed at finding out what marginal costing is all about, to evaluate and critically examine the various application of marginal costing technique for decision and to investigate the problems arising from making use of the technique and then to provide possible solution to the problems based on the.Download