Marginal Costing
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 45 rapid-fire Q&A cards.
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.
Inventory valued at variable cost only?
Finished-goods and WIP inventory under marginal costing carries only variable cost — fixed costs are written off and never sit in the balance sheet.
Sales price per unit is constant?
no quantity discounts, no price drops as volume rises.
Variable cost per unit is constant?
no economies of scale, no input-price changes within the analysis range.
Total fixed cost is constant?
no step-up in capacity (no new shed, no extra supervisor) within the analysis range.
MCQ practice tests
Chapter-wise mock tests with instant scoring.
PDF study notes
More chapters in Module D - Taxation and Fundamentals of Costing
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