logging in or signing up marginal costing basics ashishaggarwal Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: Embed: Flash iPad Copy Does not support media & animations WordPress Embed Customize Embed URL: Copy Thumbnail: Copy The presentation is successfully added In Your Favorites. Views: 721 Category: Education License: All Rights Reserved Like it (1) Dislike it (0) Added: November 27, 2010 This Presentation is Public Favorites: 0 Presentation Description marginal costing basics Comments Posting comment... Premium member Presentation Transcript MARGINALCOSTING : MARGINALCOSTING BY: ASHISH AGGARWAL FAYOL HOUSE 10101028HARYANA SCHOOL OF BUSINESSGJUS&T, HISSAR Marginal Costing : Marginal Costing Meaning of Marginal cost – Marginal cost means that increase of total cost witch happens by increased or decreased by one unit in the production volume. Example – Unit Total cost Rs. Marginal cost Rs. 0 500 (Fixed cost) - 1 800 300 2 1100 600 3 1400 900 Marginal costing is a variable cost. CONCEPT : CONCEPT Prime cost Fixed Cost Variable Cost Contribution Profit Loss Break even point concept Basic Equation:Variable Cost = Direct Materials + Direct Labor + Direct ExpensesVariable cost per unit = Difference in cost / Difference in Activity levelVariable Cost is also called as Marginal Cost. : Basic Equation:Variable Cost = Direct Materials + Direct Labor + Direct ExpensesVariable cost per unit = Difference in cost / Difference in Activity levelVariable Cost is also called as Marginal Cost. Marginal Cost Equation:Sales (S) = Variable Cost (V) + Fixed Expenses (F) + or – Profit (P) / Loss (L)S = SalesV = Variable CostF = Fixed Expenses+P = Profit-P = LossSales - Variable Cost = Fixed Expenses + or – Profit / LossS - V = F + or – P : Marginal Cost Equation:Sales (S) = Variable Cost (V) + Fixed Expenses (F) + or – Profit (P) / Loss (L)S = SalesV = Variable CostF = Fixed Expenses+P = Profit-P = LossSales - Variable Cost = Fixed Expenses + or – Profit / LossS - V = F + or – P Slide 6: Contribution: Sales – Variable Cost = Contribution = S - V Fixed Expenses + or – Profit / Loss = Contribution = F + or – P In simple form, S – V = F + or – P Slide 7: Break Even Point: A business is said to break even when its total sales are equal to its total costs. It is a point where There is no profit or no loss. Contribution is equal to Fixed Expenses. Assumptions : Assumptions Fixed cost remains unchanged. Per unit SP remains constant. Per unit variable cost of a product remains constant. How To Calculate? : How To Calculate? Equation Method High and low points Method Least square Analytical method Use in Business decision making : Use in Business decision making Make OR Buy decision Change in product Mix Pricing decision Slide 11: You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
marginal costing basics ashishaggarwal Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: Embed: Flash iPad Copy Does not support media & animations WordPress Embed Customize Embed URL: Copy Thumbnail: Copy The presentation is successfully added In Your Favorites. Views: 721 Category: Education License: All Rights Reserved Like it (1) Dislike it (0) Added: November 27, 2010 This Presentation is Public Favorites: 0 Presentation Description marginal costing basics Comments Posting comment... Premium member Presentation Transcript MARGINALCOSTING : MARGINALCOSTING BY: ASHISH AGGARWAL FAYOL HOUSE 10101028HARYANA SCHOOL OF BUSINESSGJUS&T, HISSAR Marginal Costing : Marginal Costing Meaning of Marginal cost – Marginal cost means that increase of total cost witch happens by increased or decreased by one unit in the production volume. Example – Unit Total cost Rs. Marginal cost Rs. 0 500 (Fixed cost) - 1 800 300 2 1100 600 3 1400 900 Marginal costing is a variable cost. CONCEPT : CONCEPT Prime cost Fixed Cost Variable Cost Contribution Profit Loss Break even point concept Basic Equation:Variable Cost = Direct Materials + Direct Labor + Direct ExpensesVariable cost per unit = Difference in cost / Difference in Activity levelVariable Cost is also called as Marginal Cost. : Basic Equation:Variable Cost = Direct Materials + Direct Labor + Direct ExpensesVariable cost per unit = Difference in cost / Difference in Activity levelVariable Cost is also called as Marginal Cost. Marginal Cost Equation:Sales (S) = Variable Cost (V) + Fixed Expenses (F) + or – Profit (P) / Loss (L)S = SalesV = Variable CostF = Fixed Expenses+P = Profit-P = LossSales - Variable Cost = Fixed Expenses + or – Profit / LossS - V = F + or – P : Marginal Cost Equation:Sales (S) = Variable Cost (V) + Fixed Expenses (F) + or – Profit (P) / Loss (L)S = SalesV = Variable CostF = Fixed Expenses+P = Profit-P = LossSales - Variable Cost = Fixed Expenses + or – Profit / LossS - V = F + or – P Slide 6: Contribution: Sales – Variable Cost = Contribution = S - V Fixed Expenses + or – Profit / Loss = Contribution = F + or – P In simple form, S – V = F + or – P Slide 7: Break Even Point: A business is said to break even when its total sales are equal to its total costs. It is a point where There is no profit or no loss. Contribution is equal to Fixed Expenses. Assumptions : Assumptions Fixed cost remains unchanged. Per unit SP remains constant. Per unit variable cost of a product remains constant. How To Calculate? : How To Calculate? Equation Method High and low points Method Least square Analytical method Use in Business decision making : Use in Business decision making Make OR Buy decision Change in product Mix Pricing decision Slide 11: