Variable costing - Assignment Example

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Variable costing

Despite the various methods of pricing a firm based on its industry should select the most effective method to the firm. Costing is the main function in every firm, the rational being every firm exists in its industry with the main aim as profit making. References 8 VARIABLE COSTING Executive summary This is a report about a review of marginal costing as used in the managerial accounting system. Certain terminologies associated with the concept of marginal costing are identified in the report. The report also defines logically certain terms like variable costs, fixed costs, CVP and breakeven analysis as the key concepts. It goes ahead to prove the rational and marginal costing concepts as used in short term decision making. Being a costing technique, several assumptions such as division of cost element into fixed costs and variable costs, variable cost being considered directly proportional to the production volume, fixed costs being constant throughout the production levels and is being shared according to the volume of production per unit, cost is only influenced by the volume output, and at all levels, the selling price would remain unchanged, are associated with it. ...Show more

Summary

Costing is one of the managerial accounting functions which needs a careful selection and evaluation of the effectiveness of every technique.Despite the various methods of pricing a firm based on its industry should select the most effective method to the firm…
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