[amp_mcq option1=”Both (A) and (R) are correct” option2=”(A) is correct, but (R) is incorrect” option3=”(A) is incorrect, but (R) is correct” option4=”Both (A) and (R) are incorrect” correct=”option2″]<\/p>\n
The correct answer is: Both (A) and (R) are correct.<\/strong><\/p>\n Marginal costing is a cost accounting method that focuses on the costs that change in response to changes in production volume. Under marginal costing, only variable costs are considered to be relevant costs when making decisions about whether to produce or purchase a product.<\/p>\n The marginal cost of producing a product is the additional cost incurred to produce one more unit of the product. The purchase price of a product is the price that must be paid to acquire one unit of the product from an external supplier.<\/p>\n If the marginal cost of producing a product is less than the purchase price of the product, then it is more profitable to purchase the product rather than produce it. This is because the company will save money by not having to incur the variable costs associated with production.<\/p>\n Therefore, both (A) and (R) are correct.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Both (A) and (R) are correct” option2=”(A) is correct, but (R) is incorrect” option3=”(A) is incorrect, but (R) is correct” option4=”Both (A) and (R) are incorrect” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-48024","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n