Which of the following are the assumptions of marginal costing? (a) All the elements of cost can be…
All four statements are assumptions of marginal costing. Costs are separated into fixed and variable components, total fixed cost and unit selling price are taken as…
Choose your answer
Which of the following are the assumptions of marginal costing?
(a) All the elements of cost can be divided into fixed and variable components.
(b) Total fixed cost remains constant at all levels of output.
(c) Total variable cost varies in proportion to the volume of output.
(d) Per unit selling price remains unchanged at all levels of operating activity.
Answer and explanation
Correct answer D
All four statements are assumptions of marginal costing. Costs are separated into fixed and variable components, total fixed cost and unit selling price are taken as constant, and total variable cost changes in proportion to output.
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West Bengal SET (WB SET)