HOW MARGINAL COSTING IS RELATED IN IOCL

Question

Accepted Answer

Marginal costing is related to IOCL in terms of cost analysis and decision-making.

Marginal costing helps in determining the cost of producing an additional unit of output in IOCL.
It helps in analyzing the impact of changes in production volume on costs and profitability.
Marginal costing assists in decision-making regarding pricing, product mix, and cost control in IOCL.
It focuses on variable costs and contribution margin, which are crucial for IOCL's financial performance.
For example, IOCL can use marginal costing to evaluate the profitability of producing and selling an additional liter of fuel.

Accepted Answer

when the demand of core products of iocl increase then the main focus is on variable cost per unit of production, because if this is not minimum/ reasonable then the risk as follows:-

-reduced profit

-increased cost of production

-incresed price of products leads can result low sale

-can arise issue on company on going concerns.

HOW MARGINAL COSTING IS RELATED IN IOCL

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