Question: Which of the following is a key benefit of using marginal costing?

Options:

1. It provides a detailed analysis of fixed costs.
2. It simplifies the decision-making process.
3. It is required by GAAP.
4. It allocates fixed costs to products.

Correct Answer: It simplifies the decision-making process.

Solution:

Marginal costing simplifies the decision-making process by focusing on variable costs and contribution.