Difference between marginal costing and differential costing
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differential cost
Differential cost refers to the difference in cost between two or more possible business decisions. When faced with situations that require choosing a solution, business managers must choose the most viable alternative. More often than not, cost and profit are the bottom-line figures that will influence their decision. Managers must determine the cost of both options and see the difference to be able to make a sound decision.
marginal cost
Opportunity cost measures the benefits that will be lost if one option is chosen over another. It is the cost of an alternative that is foregone. Managers may have to choose between options that look appealing, but choosing which one is better is a decision should be made after considering the opportunity cost of other alternative options.