Marginal Costing, Absorption Costing, and Income Statement

Management
accounting

TABLE OF CONTENT
 Introduction
 Marginal costing
 Characteristics of marginal costing
 Absorption costing
 Features of absorption costing
 Income statement
 Conclusion
 References

INTRODUCTION
 Management accounting is the procedure of preparing reports about the
business and its operation and help the managers to take decisions about
short-term, mid-term and long term decisions.
 In this report a company called Marshall is being taken which is
indulged in the business of superior natural stone.
 In this report marginal costing, absorption costing and income statement
for the company have been made.
 Along with this different characteristics of marginal costing and
absorption costing is mentioned in this report.

MARGINAL COSTING
 Marginal costing is a tool and technique which is being used to know the variable
cost, by charging to units of cost.
 Basically this cost is concerned with increase and decrease when the business gets
a cost of producing one more unit, which is known as incremental cost.
 This cost is fully based on the expenses of production which are divided in two
cost first is variable and second is direct, which includes – labour costs, material,
equipment and fixed manufacturing cost.