Which of these statements are true of marginal costing? (i) The contribution per unit will be constant if the sales volume increases. (ii) There is no under- or over-absorption of overheads. (iii) Marginal costing does not provide useful information for decision making.
A、(i) and (ii) only
B、(ii) and (iii) only
C、(ii) only
D、(i), (ii) and (iii)
A、(i) and (ii) only
B、(ii) and (iii) only
C、(ii) only
D、(i), (ii) and (iii)
【参考答案及解析】
Total contribution will increase as sales volume increases, but the contribution per unit will be constant as long as the sales price and variable cost per unit are unchanged. Overhead is not absorbed to product unit so there is no under/over absorption of overhead. Marginal costing does provide useful information for decision making because it highlights contribution, which is a relevant cash flow for decision-making purposes.
Total contribution will increase as sales volume increases, but the contribution per unit will be constant as long as the sales price and variable cost per unit are unchanged. Overhead is not absorbed to product unit so there is no under/over absorption of overhead. Marginal costing does provide useful information for decision making because it highlights contribution, which is a relevant cash flow for decision-making purposes.