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DIFFERENCE BETWEEN MARGINAL COSTING AND ABSORPTION COSTING

DIFFERENCE BETWEEN MARGINAL COSTING AND ABSORPTION COSTING

 

There are two alternative approaches for the valuation of inventory; they are Marginal Costing and Absorption Costing. In marginal costing, marginal cost is determined by bifurcating fixed cost and variable cost. Only variable costs are charged to operation, whereas the fixed cost are excluded from it and are charged to profit and loss account for the period…..

 

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