Multiple choice

Read the following statements:

  1. Marginal costing and Absorption costing are the same.
  2. For decision making, absorption costing is more suitable than marginal costing.
  3. Cost-volume-profit relationships also denote break-even point.
  4. Marginal costing is based on the distinction between fixed and variable costs. Which of the following combinations gives true statements with regard to above?

  1. 1 and 2

  2. 2 and 3

  3. 3 and 4

  4. 4 and 2
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Marginal costing may be defined as the technique of presenting cost data wherein variable costs and fixed costs are shown separately for managerial decision-making Absorption Costing is apportionment of total costs to the cost center in order to determine the total cost of production.

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