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DIFFERENTIAL COSTING
Marginal costing is often confused with differential costing. The word 'DIFFERENTIAL COSTING' means 'a technique used in the preparation of adhoc information where only cost and income differences between alternate courses of action are taken into consideration'. Therefore, while decision making; only an option with overall gain are selected. The term 'differential cost' means the gross increase or decrease in total costs resulting from a difference in production. The differential cost is known as 'incremental cost' while the cost increases and 'decremental cost' while the cost decreases.
Beginning inventory on March 1 consisted of 2,000 units each costing $11.20 . During March, the following was purchased for inventory: Date Purchase
The owner of the Hughes Car Wash believes that the relationship between the number of cars washed and the amount of labor employed is Q = 0.8 + 4.5 L - 0.3 L2 where Q = the num
Samuel Construction Company engaged in a contract to construct a building on 1 July 2011 with completion of the contract by the 30 June 2014. The contract price amounted to a tota
Consider the following information, prepared based on a capacity of 40,000 units: Category Cost per Unit Variable manufacturing costs
Forbes Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the period, the company estimated manufac
Radovilsky's Department Store in Haywood, California, maintains a successful catalog sales department in which a clerk takes orders by telephone. If the clerk is occupied on one li
Daisy Ltd has a net profit after tax of $3 400 000 for the year ending 30 June 2012. For the entire financial year Daisy Ltd had two million $1.00 cumulative preference shares on
types of operating costing
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Price and Cost information play no role in negotiated transfer prices. Do you agree? Describe.
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