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Question

Under marginal costing, which of the following costs will NOT be attributed to the product cost?

A Raw material cost Correct Answer Incorrect Answer
B Freight inward Correct Answer Incorrect Answer
C Labour cost Correct Answer Incorrect Answer
D Rent Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Marginal costing only considers variable costs as product costs. This is because marginal costing only takes into account the costs that vary with the level of production. In other words, marginal costing only considers the direct costs associated with producing a unit of product, such as the cost of materials, direct labour, and variable overhead.

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