Which of the following are NOT assumptions of Marginal Costing? a) The total cost can be segregated…
Marginal costing assumes fixed cost remains constant in total and variable cost remains constant per unit within the relevant range. Fixed cost per unit therefore changes…
Choose your answer
Which of the following are NOT assumptions of Marginal Costing?
a) The total cost can be segregated into fixed and variable costs.
b) Fixed costs per unit of production remain constant.
c) Variable cost remains constant per unit of output.
d) The selling price per unit remains unchanged.
e) Variable cost is variable per unit.
Answer and explanation
Correct answer B
Marginal costing assumes fixed cost remains constant in total and variable cost remains constant per unit within the relevant range. Fixed cost per unit therefore changes with output, while variable cost per unit does not. Statements (b) and (e) are not assumptions.
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Telangana SET (TG SET)