Marginal costing is a technique of ascertaining marginal costs or variable costs. it is not a system for cost ascertainment, but is mainly a technique to deal with the effect on profits of changes in volume or type of output. This technique may be used in conjunction with other methods of costing. Marginal costing is also known as ‘direct costing’ or ‘variable costing’. The latter expressions are mainly used in the United States.

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