[amp_mcq option1=”Make or Buy decisions” option2=”Profit planning” option3=”Shut-down decisions” option4=”All of the above” correct=”option4″]<\/p>\n
The correct answer is D. All of the above.<\/p>\n
Marginal costing is a technique that helps businesses to understand the costs associated with producing additional units of a product. This information can be used to make decisions about whether to produce a product, how much to charge for it, and when to shut down production.<\/p>\n
Marginal costing is useful for make or buy decisions because it helps businesses to understand the costs of producing a product in-house versus the costs of buying it from another company. If the marginal cost of producing a product is lower than the price that the company can charge for it, then it is usually more profitable to produce the product in-house. However, if the marginal cost of producing a product is higher than the price that the company can charge for it, then it is usually more profitable to buy the product from another company.<\/p>\n
Marginal costing is also useful for profit planning because it helps businesses to understand the costs that are associated with changes in production levels. This information can be used to forecast profits and to make decisions about how to increase or decrease production levels in order to maximize profits.<\/p>\n
Finally, marginal costing is useful for shut-down decisions because it helps businesses to understand the costs that are associated with producing a product at a loss. If the marginal cost of producing a product is higher than the revenue that the company can generate from selling the product, then it is usually more profitable to shut down production.<\/p>\n
In conclusion, marginal costing is a useful technique for businesses that are trying to make decisions about production, pricing, and profitability.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Make or Buy decisions” option2=”Profit planning” option3=”Shut-down decisions” option4=”All of the above” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-49913","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n