Marginal costing, Accounting Basics

Which statements about marginal costing are correct?

1. The marginal cost of a product involves an allowance for fixed overheads.

2. The marginal cost of a product presents the additional cost of making one extra unit.

3. If inventory decreases throughout a period, the profits under absorption costing will be lower than under marginal costing.

A. 1 only 

B. 1, 2 and 3 

C. 2 only 

D. 2 and 3 only

Posted Date: 2/13/2013 12:39:04 AM | Location : United States

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