Question

The cost incurred for an additional product is known as ________

A Differential cost Correct Answer Incorrect Answer
B Marginal cost Correct Answer Incorrect Answer
C Absorption cost Correct Answer Incorrect Answer
D Standard cost Correct Answer Incorrect Answer
E Budget cost Correct Answer Incorrect Answer

Solution

Marginal Cost is the cost that is incurred on every marginal or additional product, i.e. if we move from 0 units to 1 unit, the increase in total costs reflects the marginal cost of that unit.

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