Cost Accounting Interview Questions

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what is marginal cost?

Asked By: Interview Candidate | Asked On: Jul 30th, 2005

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Answered by: T.Prasad

Answered On : Aug 10th, 2006

Marginal Cost is the cost with is incurred to produce one more extra unit.

Example to produce 100 units cost is Rs. 500/-

to produce the 101th unit the cost became Rs. 520/- (The cost to produce one more unit i.e, unit is Rs. 20/-) The Rs. 20/- is called Marginal Cost.

Answered by: ngodza22 on: Jun 28th, 2008

it is a costing rule technique that excludes fixed cost from influencing decisions because they are said to be irrelevent cost.... simply because they are bound to be incurred even if a firm produce or doesn't produce eg rent,

Answered by: andy on: Dec 26th, 2006

Marginal Cost is variable cost AS LONG AS your fixed assets can handle the output. If that additional unit forces you to acquire more assets to handle it, your marginal cost can be way out of line with your average variable cost.

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