Which of the following statements are the assumptions of marginal costing? a) Per unit selling price…
All four statements describe the standard assumptions of marginal costing. Selling price and total fixed cost are treated as constant, variable cost changes proportionately…
Choose your answer
Which of the following statements are the assumptions of marginal costing?
a) Per unit selling price remains unchanged at all the levels of operating activity
b) Total fixed cost remains constant for all production units
c) Total variable cost varies in proportion to the volume of output
d) All the elements of cost can be divided into fixed and variable components.
Answer and explanation
Correct answer D
All four statements describe the standard assumptions of marginal costing. Selling price and total fixed cost are treated as constant, variable cost changes proportionately with output, and costs are separated into fixed and variable components.
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Karnataka SET (KSET)