Question

2. The marginal cost statement.
a) shows the gross profit
B) is sent to the shareholders.
J shows classification of costs as direct and Indized
D) can be used to predid future profits at different
levels of activity​

Answer 1

Answer:

option (c) is the correct answer

Answer 2

Option C) shows classification of costs as direct and indirect -This is the answer.

About marginal cost:

• 'Marginal' means 'to the margin' or 'to the edge'.
• 'Marginal cost' refers to the difference in the cost of production that occurs when one more unit is manufactured/ produced to the total.
• This cost will be a meagre amount as it is calculated only for one product/ unit produced. So it is going to be a slight difference. Hence it is called 'marginal cost'.
• It includes the direct and indirect variable cost used for production.
• Option A) is incorrect because it does not show the gross profit.
• Option B) is wrong as it will not be sent to the shareholders.
• Option C) is correct because it includes the variable direct and indirect expenses of its production.
• Option D) is incorrect because it can in no way be used to predict future profits at different levels of activity​.
• Therefore the correct answer is: Option C) shows classification of costs as direct and indirect.