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What is the main focus of marginal costing?

Practice Questions

Q1
What is the main focus of marginal costing?
  1. Total costs
  2. Variable costs
  3. Fixed costs
  4. Sunk costs

Questions & Step-by-Step Solutions

What is the main focus of marginal costing?
  • Step 1: Understand what marginal costing is. It is a method used in accounting to analyze costs.
  • Step 2: Identify the types of costs. There are fixed costs (which do not change) and variable costs (which change with production).
  • Step 3: Focus on variable costs. Marginal costing mainly looks at how these variable costs affect overall costs.
  • Step 4: Recognize that marginal costing helps in decision-making, especially when deciding how much to produce.
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