New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Under marginal costing, which of the following cost will

    NOT be attributed to the product cost?
    A Raw material cost Correct Answer Incorrect Answer
    B Freight inward Correct Answer Incorrect Answer
    C Labor cost Correct Answer Incorrect Answer
    D Rent Correct Answer Incorrect Answer

    Solution

    Marginal costing is a technique of costing in which only variable costs are treated as product cost and charged to the product. the fixed costs are treated as period cost and are therefore charged to the accounting period in which such fixed cost is incurred irrespective of the quantity and value of the products produced or sold. As such, rent, which is a fixed cost, will not be attributed to the product cost under marginal costing.

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