Accounting (AS)·Overheads · NSSCAS 5.1.2
Marginal costing in decision making
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A hotel offers to buy 2,000 packs of juice at a price below what it costs to keep the lights on — should Ndapewa say yes? Marginal costing gives you one golden rule that answers pricing, special orders, make-or-buy and close-a-department questions. This is a favourite in Paper 2, where a calculate question is almost always followed by 'advise management' — and this lesson teaches you exactly how to earn those advice marks.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Accounting (AS) 5.1.2):
- use marginal costing in decision making: pricing a product, accept or reject a special order, make or buy a product, continue or discontinue production
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Miss Olivia and Mike talk through the whole topic — with the figure and working drawn live.