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What is Marginal Cost and Distinguish between Differential Cost and Marginal Cost?

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posted Jun 14 by Prajwal C.m.

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Marginal Cost

Marginal Cost represents the increase or decrease in total cost, which occurs with a small change in output say, a unit of output. In cost accounting, variable costs represent marginal cost.

Distinguish between Differential Cost and Marginal Cost

The main point which distinguishes marginal cost and differential cost is that of change in fixed cost when volume of production increases or decreases by a unit of production. In the case of differential cost, variable as well as fixed cost i.e. both costs change due to change in the level of activity, whereas under marginal costing only variable cost changes due to change in the level of activity.

answer Jun 14 by Nway Nadar
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