MARGINAL COSTING

for t.y.b.com students

Dr. Raj soshte

ASST. PROF.Accountancy
nss college of commerce and economics, tardeo, mumbai
 COST
VARIABLE COST SEMI VARIABLE Fixed cost
COST
DEPENDS ON PARTLY FIXED And partly variable DOES NOT DEDEPENDS ON
PRODUCTION production

 Direct material  Electric bill  Rent

 Direct Labour  Telephone bill
 Direct expenses
“Marginal costing is technique to
estimate incremental cost for
incremental production”
 INCOME STATEMENT
Particulars Amount
Sales Xx
(-) Variable cost (x)
Contribution Xx
(-) Fixed cost (x)
Net Profit Xx
 Profit/Volume Ratio = Contribution
(P/V) Sales

 Break even Point (UNITS) = fixed cost .

Contribution Per unit

 Break even Point (Rs.) = fixed cost

P/V Ratio

 Estimated Sales (Units) = fixed cost + Expected Profit

Contribution Per unit
Estimated Sales (Rs.) = fixed cost + Expected Profit
P/V Ratio

 Marginal of safety (Units) = Es (units) – B.E.P (Units)

Marginal of safety (Rs.) = Es (Rs.) – B.E.P (Rs.)

Marginal of safety (Rs.) = Net Profit

P/V Ratio

 P/V Ratio = Different in profit

Different in sales