Advantages of Variable or Direct or Marginal Costing System Learning Objectives: What are the advantages of variable costing system? Why absorption costing continues to be used almost exclusively for external reporting purposes? Variable costing has the following main advantages: The data that are required
Marginal Costing System
Marginal Costing is a costing method that includes only variable manufacturing costs–direct materials, direct labor, and variable manufacturing overhead–in unit product cost. Marginal costing is also called variable costing and direct costing.