DIRECT COSTING

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Six (6) disadvantages of using marginal costing.



Marginal Costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to units of cost, while the fixed cost for the period is completely written off against the contribution.

Disadvantages of using marginal or direct costing include the following:

Separation of costs into fixed and variable costs might be difficult, … Read the rest

9 benefits of marginal costing

9 benefits of marginal costing.

Marginal or direct costing is the accounting system in which variable costs are charged to cost units and fixed costs of the period are written off in full against the aggregate contribution.

Arguments for (benefits)  the use of marginal or direct costing include the following:

  • For non-profit planning purposes, management requires cost volume and profit relationship data, which
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