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3.
What are
management?
the
objectives
of
financial
Marginal cost remains the same per unit of output whether there is increase or
decrease in production.
2. Realistic :
It is realistic as fixed cost is eliminated. Inventory is valued at marginal cost.
Therefore, it is more realistic and uniform. No fictitious profit arises.
3. Simplified overhead Treatment :
There is no complication of over-absorption and under-absorption of overheads.
4. Facilitates control :
Classification of cost as fixed and variable helps to have greater control over costs.