📝 One-liners · 45 cards
Marginal Costing
Cost recording + cost reporting?
It is a complete technique — it not only records costs as variable/fixed but also reports their behaviour to management for decision-making.
Total cost segregated?
Every cost is forcibly classified as either fixed or variable. Semi-variable costs are split into their fixed and variable components before classification.
Fixed cost excluded from product cost?
Fixed costs are not loaded into per-unit product cost; they are charged to the revenue of the period in which they are incurred. This is the defining feature.
Contribution drives profitability?
Contribution of a product, department or segment becomes the primary profitability metric — not gross profit, not net margin.
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