MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

Question

In which costing technique are variable costs charged to cost units and period costs written off against contribution?
A. Contract costing
B. Activity-based costing
C. Process costing
D. Marginal costing
E. Batch costing

Answer

Answer:
D. Marginal costing

Explanation:
In marginal costing, only variable costs are charged to cost units, and fixed costs are treated as period costs that are written off against the total contribution of the business.

Tags: Costing Techniques, Marginal Costing, Variable Cost
Level: Level 1

Topic: Costing Techniques
Series: MAY 2017

Uploader: Kwame Aikins

MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

Explanation:
In marginal costing, only variable costs are charged to cost units, and fixed costs are treated as period costs that are written off against the total contribution of the business.

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MI – May 2017 – L1 – SA – Q6 – Costing Techniques

Identify the costing technique where variable costs are charged to cost units.

Explanation: In marginal costing, only variable costs are charged to cost units, and fixed costs are treated as period costs that are written off against the total contribution of the business.

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Explanation:
In marginal costing, only variable costs are charged to cost units, and fixed costs are treated as period costs that are written off against the total contribution of the business.