22.9 - Key Concepts in Marginal Costing
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
What is the formula for calculating marginal cost?
💡 Hint: Think about how costs increase when production increases.
Define contribution in your own words.
💡 Hint: Consider what portion of sales goes towards fixed costs and profit.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What is marginal cost?
💡 Hint: Focus on the term 'additional' related to unit production.
True or False: Contribution is calculated as Selling Price minus Fixed Costs.
💡 Hint: Consider what costs contribute to the product pricing structure.
Get performance evaluation
Challenge Problems
Push your limits with advanced challenges
A company produces 1,000 units of a product. The fixed costs are ₹200,000, the variable cost per unit is ₹100, and the selling price is ₹200. Calculate the profit if production increases to 1,200 units while the selling price and variable costs remain unchanged.
💡 Hint: Remember to calculate total contributions and then subtract fixed costs.
A firm has fixed costs of ₹75,000 and a contribution margin of ₹150 per unit. How many units must the firm sell to break even?
💡 Hint: To find the break-even point, divide fixed costs by contribution per unit.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.