Interview Questions Answers.ORG
Interviewer And Interviewee Guide
Interviews
Quizzes
Home
Quizzes
Interviews Finance and Accounts Interviews:Accounting And FinanceAccounting ReportsAccounting TypesAuditor InternalBalance Sheet Bank ClerkBank ReconciliationBank TellerBasic AccountingBasic Financial ManagementBudgetaryBudgetary ControlCapital MarketCapital RationingCapital StructureCapitalizationCashierCorporate FinanceCost AccountancyCost ElementDepreciation Double Entry System ExpendituresFinanceFinance GeneralFinancial AccountingFinancial AdvisorFinancial AnalysisFinancial StatementsLedgerManager FinanceMarginal CostingMaterial Cost MBA Finance PayrollProfit And LossSupervisoryUniform CostingWorking Capital Management
Copyright © 2018. All Rights Reserved
Marginal Costing Interview Question:
What are the limitations of Marginal Costing?
Submitted by: AdministratorThe limitations of Marginal Costing:
- The classification of total costs into fixed and variable cost is difficult.
- In this technique fixed costs are totally eliminated for the valuation of inventory of finished and semi-finished goods. Such elimination affects the profitability adversely.
- In marginal costing historical data is used while management decisions are related to future events.
- It does not provide any standard for the evaluation of performance.
- Selling price fixed on the basis of marginal cost will be useful only for short period of time.
- Assessment of profitability on the marginal cost base can be used only in the short period of time.
Submitted by: Administrator
- The classification of total costs into fixed and variable cost is difficult.
- In this technique fixed costs are totally eliminated for the valuation of inventory of finished and semi-finished goods. Such elimination affects the profitability adversely.
- In marginal costing historical data is used while management decisions are related to future events.
- It does not provide any standard for the evaluation of performance.
- Selling price fixed on the basis of marginal cost will be useful only for short period of time.
- Assessment of profitability on the marginal cost base can be used only in the short period of time.
Submitted by: Administrator
Copyright 2007-2024 by Interview Questions Answers .ORG All Rights Reserved.
https://InterviewQuestionsAnswers.ORG.
https://InterviewQuestionsAnswers.ORG.