Pakistan International School Jeddah – English Section
GRADE: AS LEVEL
Year 2023 - 24
NOTES & WORKSHEET
CHAPTER 35 – MARGINAL COSTING
Student Name: ____________________ Section: AS/Commerce
1
,Extracts from the syllabus:
2.2.3 Marginal costing
Candidates should have an understanding of:
• How to calculate the contribution of a product
• How to interpret a break-even chart
• How to calculate the break-even point, contribution to sales ratio, level of output or sales to
achieve a target profit, and margin of safety
• The use and limitations of break-even analysis
• How to prepare costing and profit statements using marginal costing
• How to prepare a statement reconciling the reported profits using marginal costing and
absorption costing
• The uses and limitations of marginal costing
• The usefulness of marginal costing data as a support for management decision-making,
including make-or buy, special orders, closure of business unit, limiting factors, target profit.
• Non-financial factors and their significance
2.2.4 Cost–volume–profit analysis
Candidates should have an understanding of:
• The advantages and limitations of cost–volume–profit analysis.
• The usefulness of cost–volume–profit data as a support for management decision-making.
• How to apply costing concepts to make business decisions and recommendations using
supporting data.
• Non-financial factors and their significance.
2
,Review questions:
3
, 4
GRADE: AS LEVEL
Year 2023 - 24
NOTES & WORKSHEET
CHAPTER 35 – MARGINAL COSTING
Student Name: ____________________ Section: AS/Commerce
1
,Extracts from the syllabus:
2.2.3 Marginal costing
Candidates should have an understanding of:
• How to calculate the contribution of a product
• How to interpret a break-even chart
• How to calculate the break-even point, contribution to sales ratio, level of output or sales to
achieve a target profit, and margin of safety
• The use and limitations of break-even analysis
• How to prepare costing and profit statements using marginal costing
• How to prepare a statement reconciling the reported profits using marginal costing and
absorption costing
• The uses and limitations of marginal costing
• The usefulness of marginal costing data as a support for management decision-making,
including make-or buy, special orders, closure of business unit, limiting factors, target profit.
• Non-financial factors and their significance
2.2.4 Cost–volume–profit analysis
Candidates should have an understanding of:
• The advantages and limitations of cost–volume–profit analysis.
• The usefulness of cost–volume–profit data as a support for management decision-making.
• How to apply costing concepts to make business decisions and recommendations using
supporting data.
• Non-financial factors and their significance.
2
,Review questions:
3
, 4
