Question

Marginal cost is a technique where only

• A. The variable costs are considered while computing the cost of a product
• B. The fixed costs are considered
• C. The fixed costs are charged to production a/c
• D. The variable costs are charged to P and L a/c

Answer 1

The correct option is A The variable costs are considered while computing the cost of a product

Marginal costs are the costs associated with producing an additional unit of output. It is calculated as the change in total production costs divided by the change in the number of units produced. Marginal costs exist when the total cost of production includes variable costs.