Marginal Costing

This is an important but easy topic. This is easy because the only thing which you will have to take care about is the format of the P&L Account/ Income Statement, which is pretty consistent and is given below.

What is the difference between Marginal and Absorption Costing?
The difference between these two is that in marginal costing, Fixed FOH is not made the part of the cost of production (hence fixed cost does not become the part of Stock also. This point is clearly express below in the tutorial), where as in Absorption costing Fixed FOH is the included in the cost of production.

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marginal Marginal Costing

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