Question

In Marginal Costing, fixed costs are treated as period costs and are charged in full to the profit and loss account of the accounting period in which they were not incurred.
T/F

Answer 1

Answer:

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Explanation:

can you send me the pic of the question then I can answer the question easily .

Answer 2

Answer:

False is the correct answer.

Explanation:

Marginal costing may be a cost accounting system wherever products or services and inventories are valued at variable prices solely. It doesn't take thought of mounted prices . This method of cost accounting is additionally referred to as direct cost accounting as solely direct prices forms the a part of product and inventory value . Prices are classified the premise of behavior of value ( i.e. mounted and variable ) rather functions as done in absorption cost accounting technique .

chracteristics of marginal costing are as follows-

• All components of value are classified into fixed and variable elements . Semi - variable prices are analyzed into mounted and variable components .

• The marginal or variable prices ( as direct material , direct labour and variable industrial plant overheads ) are treated because the value of product .
• Under marginal cost accounting the worth of finished goods and work - in - progress is additionally comprised solely of marginal prices . Variable selling and distribution are excluded for valuing these stocks . fixed prices don't seem to be considered for valuation of closing stock of finished goods and closing WIP .
• Fixed prices are treated as amount prices and are charged to profit and loss account for the amount that they're incurred .
• Prices are determined with relevancy marginal prices and contribution margin .
• Profit of departments and products is set with relevancy their contribution margin.

Thus, in marginal costing Fixed prices are treated as amount prices and are charged to profit and loss account for the amount that they're incurred .

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