marginal cost

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marginal cost

[′mär·jən·əl ′kȯst]
(industrial engineering)
The extra cost incurred for an extra unit of output.
References in periodicals archive ?
For the budgeted income statement, because we are now using marginal costing we must deduct variable costs from sales to give us the contribution and then deduct all of the fixed costs to arrive at the profit (see panel 7).
Under absorption costing this 528 [pounds sterling] is carried forward on the balance sheet as an asset (inventory), whereas under marginal costing it's taken to the income statement as a cost for the period.
In practice, a company that uses marginal costing for its management accounts would not normally be expected to prepare them.
Marginal Costing (10) is clearly the core aspect of traditional management accounting.
To assess the present-day value of Marginal Costing, the changes occurring in the business world must be analyzed more closely.
This requires different methods of cost planning than those normally provided by Marginal Costing.
The simplistic application of marginal costing can also conceal the commercial implications of a proposal.
Marginal costing underpins other management accounting techniques.
2) Chapter Zero sheds significant light on the issues related to the developments over the last two decades, which marginal costing brought to the fore in Germany yet traditional standard costing (or its proponents) in the United States failed to highlight.
The authors added Chapter Zero to the 11th edition of the marginal costing textbook to address these developments from a German management accounting perspective.
The revised regulations still permit adding transactions, amending expense apportionment methods or changing transfer-pricing methods, including the application of marginal costing in redetermination studies.
Elect the T x T, grouping or marginal costing method;