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Home > QFINANCE Dictionary > Definition of marginal costing

Definition of

marginal costing

Accounting

accounting system treating variable and fixed costs differently the accounting system in which variable costs are charged to cost units and fixed costs of the period are written off in full against the aggregate contribution. Its special value is in recognizing cost behavior, and hence assisting in decision making.

Related definitions of "marginal costing"

marginal costing - Related Articles

  • Marginal Cost

    Calculations

    Marginal cost is based on the economic theory that the more goods are produced, the lower will be the per-unit cost.

  • Contribution Margin

    Calculations

    For example, if the sales price of a good is $500 and the variable cost is $350, the contribution margin is $150, or 30% of the sales price.

  • Gross Profit Margin Ratio

    Calculations

    The gross profit margin ratio measures how efficiently a company uses its resources, materials, and labor in the production process by showing the percentage of net sales remaining after subtracting the cost of making and selling a product or service. It is usually expressed as a percentage

  • Managing Retirement Costs

    Best Practice

    In the case of large organizations, the head of human resources should ask the CFO to help by conducting an in-depth analysis of the actual costs of an older workforce, as well as the costs of recruiting replacements. In smaller organizations, the CEO, COO, and CFO should work together to determine whether
    By Beverly Goldberg

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Definitions of ’marginal costing’ and meaning of ’marginal costing’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’marginal costing’ and other financial terms with our online QFINANCE Financial Dictionary.

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