0
The increase or decrease in the total cost of a production run for making one additional unit of an item. It is computed in situations where the breakeven point has been reached: the fixed costs have already been absorbed by the already produced items and only the direct (variable) costs have to be accounted for.
Marginal costs are variable costs consisting of labor and material costs, plus an estimated portion of fixed costs (such as administration overheads and selling expenses). In companies where average costs are fairly constant, marginal cost is usually equal to average cost. However, in industries that require heavy capital investment (automobile plants, airlines, mines) and have high average costs, it is comparatively very low. The concept of marginal cost is critically important in resource allocation because, for optimum results, management must concentrate its resources where the excess of marginal revenue over the marginal cost is maximum. Also called choice cost, differential cost, or incremental cost.
Read more: http://www.businessdictionary.com/definition/marginal-cost.html#ixzz2Mdg26AC0
Orlando Zieme
Add your answer:
Earn +20 pts
Is payroll cost a controllable cost?
payroll is not controllable cost.
Is electricity cost a controllable cost?
Electricity cost not a controllable cost. The manager cannot influence this type of expense. To the extent where a cost cannot be managed it is indeed a non controllable, now for electricity, to the extent where consumption can be raised or lowered it becomes a controllable cost. If the consumption can be optimized through processes or equipments it then is a controllable cost.
Differentiate between fixed and variable overheads. which one of them is controllable and what is the effect of controlling overheads on contribution margin and finally on per unit cost?
A fixed overhead will remain the same regardless of production levels while a variable overhead will change in relation to production levels. Controlling Overheads will reduce per unit costs thereby increasing contribution margin.
What does controllable profit mean?
Controllable profit measures managerial performance Divisional profit measures divisional performance.
What is controllable spending?
Controllable spending is simply spending that a given manager has control over. Controllable spending is examined in evaluating the budget performance of the manager who had control, in seeing how well he managed costs for his unit.
What is Controllable margin most useful for?
Controllable margin is most useful for assessing the efficiency of a company's operations management in controlling variable and semi-variable costs. It helps identify the portion of operating income that can be directly influenced by management decisions and actions. This metric is particularly valuable for evaluating the effectiveness of cost control measures and improving profitability.
Is payroll cost a controllable cost?
payroll is not controllable cost.
What is a sentence for the word controllable?
I have several sentences for you.That horse is not controllable.The scientific variable is controllable in the laboratory.I want a controllable temper!
Is electricity cost a controllable cost?
Electricity cost not a controllable cost. The manager cannot influence this type of expense. To the extent where a cost cannot be managed it is indeed a non controllable, now for electricity, to the extent where consumption can be raised or lowered it becomes a controllable cost. If the consumption can be optimized through processes or equipments it then is a controllable cost.
Differentiate between fixed and variable overheads. which one of them is controllable and what is the effect of controlling overheads on contribution margin and finally on per unit cost?
A fixed overhead will remain the same regardless of production levels while a variable overhead will change in relation to production levels. Controlling Overheads will reduce per unit costs thereby increasing contribution margin.
What does controllable profit mean?
Controllable profit measures managerial performance Divisional profit measures divisional performance.
What is controllable spending?
Controllable spending is simply spending that a given manager has control over. Controllable spending is examined in evaluating the budget performance of the manager who had control, in seeing how well he managed costs for his unit.
What are controllable diseases?
A controllable diseases is a disease that can be managed. Many diseases can be managed by managing nutrition and exercising on a regular basis.
What is the difference between controllable and uncontrollable?
Controllable can be made to do what one wants. Uncontrollable does its own thing and ignores everything else.
A word in between controllable and uncontrollable?
and
Is fusion controllable as fission is reactor?
no
Are robots controllable?
ya with a joystick
