Marginal Costing as an Essential Tool for Decision Making

Marginal Costing as an Essential Tool for Decision Making

The concept of marginal costing was adopted from the economist concept of marginal costs. It has employed in the early part of this century, particularly by the famous economist Alfred Marshall. The concept is known as the addition or incremental cost of producing extra one unit of a product. When accountants begin to employ the term “ marginal cost” the idea was extended to corner not only the difference in cost resulting from the increase or decrease in the output which is the marginal cost. [Read more…]