In this article we will discuss about:- 1. Meaning of Break Even Charts 2. Significance of Break-Even Chart at Various Levels of Activity 3. Assumptions 4. Construction 5. Types 6. Advantages 7. Limitations. Meaning of Break Even Charts: 'Break even Chart' is a graphical representation of marginal costing. It is considered to be the most useful graphic representation of accounting [...]
In this article we will discuss about:- 1. Introduction to Marginal Costing 2. Definition of Marginal Costing 3. Salient Features 4. Advantages 5. Limitations. Definition or Introduction to Marginal Costing: Marginal costing is a technique of costing fully oriented towards managerial decision making and control. Marginal costing is not a method of cost ascertainment like job or process or operating [...]
Marginal costing technique is used for short-term decision-making. It assumes that fixed costs are not affected by the decision to allocate resources to different activities. Therefore, variable costs are the only relevant costs for decision-making. However, in practice, this assumption is seldom valid. Therefore, marginal costing technique has limited use in practice. To arrive at the final decision, managers consider [...]