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MODULE IV 🔰MARGINAL COSTING & ABSORPTION COSTING🔰 🔰Meaning of marginal cost The marginal cost is the change in the total cost that arises when the quantity produced is increased, i.e. the cost of producing additional quantity. 🔰Marginal costing Marginal costing is a cost accounting method that calculates the cost of producing one more unit of a product or service. It's also known as variable costing.  🔰Definition of Marginal Costing According to ICMA, London “Marginal Costing is the ascertainment of marginal cost and of the effect of profit of changes in the volume or type of output, by differentiating between fixed costs and variable costs.” It separates the product costs i.e. variable costs from the period costs i.e. the fixed costs 🔰FEATURES OF MARGINAL COSTING Marginal costing is a cost accounting method that focuses on variable costs to help businesses make decisions. It has several key features, including:  👉Focus on variable costs Marginal costing focuses on ...

🔰🔰 significance of a cash book:🔰🔰 Real-time cash position: A cash book gives a clear picture of a company's available cash at any given time, which is crucial for managing short-term financial needs.   Simplified reconciliation: By recording all cash transactions in one place, it becomes easier to reconcile cash balances with bank statements.   Facilitates budgeting and cash flow analysis: Access to accurate cash data enables businesses to create effective cash flow projections and make informed financial decisions.   Detects fraud: Regular monitoring of a cash book can help identify discrepancies or unauthorized cash withdrawals, aiding in fraud prevention.   Transparency and accountability: A well-maintained cash book enhances transparency within a company by providing a clear audit trail of all cash transactions.   Essential for small businesses: Particularly important for small businesses with limited cash reserves, as it allows for close monitoring of c...