Explain the technique of Marginal Costing and Absorption Costing. Taking a suitable example prepare a Profit and Loss Account according to Marginal Costing and Absorption Costing. 

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Marginal costing and absorption costing are two methods of cost accounting used to calculate the cost of production and determine the selling price of goods. Each method has its own unique approach, which can result in different outcomes. In this answer, we will explain the differences between marginal costing and absorption costing and then prepare a profit and loss account using each method.

Marginal Costing: Marginal costing is a technique of cost accounting where only variable costs are considered when calculating the cost of production. Variable costs are costs that change in proportion to the level of production, such as raw material, labor, and electricity. Fixed costs, such as rent and depreciation, are treated as period costs and are not included in the ___________ __________ _____________ ____ ______ ________ ___________ ______ __ ___________ ___________ _____ _________ __ ___.
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Degree : MASTER DEGREE PROGRAMMES
Course Name : Master of Arts (Entrepreneurship)
Course Code : MAER
Subject Name : Finance & Accounting
Subject Code : MER 8
Year : 2023