marginal costing and managment techniques

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Marginal costing is a tool of costing to predict or calculate estimates for profit/loss in short-term pricing plan. It is classified as management accounting. It shows how much it will cost a producer to produce one unit. Basically managerial costing is the breakdown of fixed costs and variable costs. Marginal costing deals only with variable costs, sales and contribution which by controlling it the company will be able to make more profit. When variable costs change, the output will change.
It is classified as management accounting because it helps managers to make a pricing decision. In a successful marginal costing system, managers will be able to calculate/estimate the total cost of producing one unit from materials and labour to administration expenses. Then how much revenue was made from selling a specific amount of units, so managers will be able to calculate/estimate how much profit the company made. It also can help managers to compare departments/production lines. For example, of a company have different production lines for the same product, managers will be able to calcu...

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