22.8 - Marginal Costing: Meaning
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Practice Questions
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Define marginal cost in your own words.
💡 Hint: Think about costs tied to increasing production.
What is the contribution margin?
💡 Hint: How do we calculate profit generated by each unit?
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is marginal costing?
💡 Hint: Recall how marginal costing differs from traditional costing methods.
The contribution margin is defined as ____.
💡 Hint: Think of it as the profit generated from each unit sold.
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Challenge Problems
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ABC manufacturer has fixed costs of ₹120,000, variable costs of ₹250 per unit, and each unit is sold for ₹400. If the company produces and sells 600 units, calculate total contribution, fixed cost coverage, and profit.
💡 Hint: Focus on breaking down each calculation step by step.
XYZ tech firm is evaluating a new product line. Explain how marginal costing can aid them in making decisions on pricing and product mix when considering new software development.
💡 Hint: Think in terms of decision-making benefits!
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