What is the primary focus of marginal costing?

What is the primary focus of marginal costing?

Step 1: Understand what marginal costing is. It is a method of costing that considers only variable costs.
Step 2: Identify what variable costs are. These are costs that change with the level of production, like materials and labor.
Step 3: Recognize that marginal costing does not include fixed costs, which remain constant regardless of production levels.
Step 4: Learn that the primary focus of marginal costing is to analyze how variable costs affect overall profitability.
Step 5: Understand that businesses use marginal costing to make decisions about pricing, production levels, and product lines.

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