Accounting (AS)·Overheads · NSSCAS 5.1.2
Marginal costing & contribution
Narrated lesson · press play
One extra bottle of juice - what does it really cost, and what does it really earn? Marginal costing strips a product down to its variable costs so you can see the contribution every unit makes towards fixed costs and then profit. In Paper 2 this is bread-and-butter territory: contribution statements, the contribution to sales ratio and limiting-factor rankings appear as full structured questions, so master the write-on workings in this lesson.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Accounting (AS) 5.1.2):
- explain the terms: contribution, marginal costing
- explain limiting factors and their effect in marginal costing
- use marginal costing to calculate the contribution made towards fixed costs and profit
- calculate contribution to sales ratio
Loading your lesson…
You're watching a free 3-minute preview — create a free account to keep going.