6 Write the assumptions of marginal costing. Differentiate between absorption costing and marginal costing. ( Assumptions of marginal costing (all 7 points) Differences of marginal and absorption costing (Includes all 8 points)
Answer:- Assumptions of marginal costing (all 7 points)
- Segregation of cost into fixed and variable
The whole principle of marginal costing is based on the idea that some costs vary with production while some costs don’t. Therefore, it is assumed that a clear bifurcation between fixed and variable costs is possible. Even if some costs do not entirely qualify as fixed or as variable, it is still possible to separate such mixed cost with respect to the amount, which remains fixed and the amount which varies with production.
- Volume is the only factor which influences the cost
