The production cost under marginal costing includes prime cost and variable overhead. Therefore, the correct answer is d. prime cost and variable overhead.

Here's why:

Marginal costing, also known as variable costing, includes only the variable costs of production as product costs.

1. Prime cost: This is the total cost of direct materials and direct labor for a product. This is included in the marginal costing.

2. Variable overhead: These are costs that vary with the level of output, such as raw materials or direct labor costs. This is also included in the marginal costing.

Fixed overheads, on the other hand, are not included in the product cost under marginal costing. These costs are treated as period costs and are expensed off in the period they are incurred.

Question

The production cost under marginal costing includes prime cost and variable overhead. Therefore, the correct answer is d. prime cost and variable overhead.

Here's why:

Marginal costing, also known as variable costing, includes only the variable costs of production as product costs.

1. Prime cost: This is the total cost of direct materials and direct labor for a product. This is included in the marginal costing.

2. Variable overhead: These are costs that vary with the level of output, such as raw materials or direct labor costs. This is also included in the marginal costing.

Fixed overheads, on the other hand, are not included in the product cost under marginal costing. These costs are treated as period costs and are expensed off in the period they are incurred.

Knowee AI · Accepted Answer

The production cost under marginal costing includes prime cost and variable overhead. Therefore, the correct answer is d. prime cost and variable overhead.

Here's why:

Marginal costing, also known as variable costing, includes only the variable costs of production as product costs.

1. Prime cost: This is the total cost of direct materials and direct labor for a product. This is included in the marginal costing.

2. Variable overhead: These are costs that vary with the level of output, such as raw materials or direct labor costs. This is also included in the marginal costing.

Fixed overheads, on the other hand, are not included in the product cost under marginal costing. These costs are treated as period costs and are expensed off in the period they are incurred.

Production cost under marginal costing includes .a.prime cost only .b.prime cost and fixed overhead .c.prime cost, variable overhead and fixed overhead.d.. prime cost and variable overhead.

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