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List the arguments in favour of Marginal Costing:

List the arguments in favour of Marginal Costing:

Answers

Martin
- No apportionment of overhead costs (which are frequently based on arbitrary basis) to
products and departments are necessary.
- Where sales are constant and production fluctuates, marginal costing shows a constant net
profit while absorption costing net profit would be varying.
- Over or under absorption of overheads (due to levels of activities being different from the
- Fixed costs are incurred on a time basis e.g. rent, rates, salaries, and they should therefore be
written off or expensed in the period in which they are incurred.
- Accounts prepared using marginal costing more nearly approach the actual cashflow position.
marto answered the question on February 26, 2019 at 09:45

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