A: Marginal cost is the cost of producing one additional unit. R: Marginal cost includes both fixed and variable costs. Choose the correct option. MCQ with Answer and Explanation
A: Marginal cost is the cost of producing one additional unit. R: Marginal cost includes both fixed and variable costs. Choose the correct option.
A. A is true but R is false
B. Both A and R are true and R is the correct explanation of A
C. A is false but R is true
D. Both A and R are true but R is NOT the correct explanation of A
Answer: Option A
Solution (By JKSSB Mock Tests)
Marginal cost is indeed the cost of producing one additional unit. However, it only includes variable costs, as fixed costs do not change with the level of production in the short term. A is true, R is false.
Explanation:
Carriage Inwards is a direct expense related to purchases and is added to the Trading Account. Carriage Outwards is a selling and distribution expense, shown in the Profit and Loss Account.
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