Question

What is the difference between marginal cost and standard cost?

Answer 1

The main difference between marginal costing and standard costing is,marginal cost is subset of standard cost, whereas the standard is the super set of marginal costing.

Answer 2

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• Marginal costing system is very useful for internal purposes – decision making, planning and control.

• Calculation of cost of sales, under marginal costing system, is very simple to understand.

• Marginal costing system is very simple to operate as it does not require complex apportionments of overheads.