Current budgets - definition

Marginal costing statement proforma.



When managers wish to use marginal costing in their decision making process they must separate variable and fixed cost by using the marginal costing statement. Preparation of marginal costing statement help with calculation of contribution and eventually profit using marginal costing.

Here below is the proforma of the marginal costing statement:

PARTICULARS
TSH
TSH
Sales revenue
xxx
Less: marginal cost of sales
Opening stock (valued at marginal cost)
xxx
Add: production cost (valued at marginal cost)
xxx
Total production cost
xxx
Less: closing stock (value at marginal cost)
(xxx)
Marginal cost of production
xxx
Add: variable selling, administration and distribution cost
xxx
Marginal cost of sales
xxx
Contribution
xxx
Less: fixed costs
(xxx)
Marginal costing profit
xxx

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