Page 111 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes 5.5 Review Questions

1. What do you mean by differential cost?
2. Discuss incremental cost and decremental cost.

3. What are the features of differential costing?
4. State the difference between differential costing and marginal costing.
5. Enumerate the various applications of differential costing.
6. Define sunk costs.
7. What do you mean by fixed costs?

8. “Differential costing is more useful for those situations where fixed costs also differ and
thus more appropriate for both short run and long run decisions.” Comment.

Answers: Self Assessment

1. Differential 2. differential costing

3. incremental 4. decremental
5. relevant 6. short
7. Marginal 8. Revenue
9. Contribution 10. Sunk

11. scope 12. absorption costing and marginal costing
13. Differential cost analysis 14. production
15. differential cost

5.6 Further Readings

Books Bhar. K.B. (2008) Cost Accounting, Methods & Problem, Academic Publishers.
Lal, Jawahar & Srivastava, Seema (2009) Cost Accounting, 4 Edition, Tata McGraw-
th
Hill Education.
Nigam, Lal B.M. & Jain I. C. (2001) Cost Accounting: An Introduction, PHI Learning
Pvt. Ltd.
Thakur. S.K, (2009). Cost Accounting: Theory and Practice, Excel Books.

Online links http://www.ehow.com/info_8480512_advantages-differential-pricing.html

http://www.slideshare.net/coiness/differential-cost-analysis-chapter7
http://www.gfoa.org/downloads/GFRAug04.pdf
http://www.wisegeek.org/what-is-differential-cost.htm

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