COST MANAGEMENT

Assignment
Research papers on
"MARGINAL COSTING"

Submitted by :
Shravani J
3rd sem
Finance
1BM14MBA61

Marginal Costing:
Marginal cost is the change in the total cost that arises when the quantity
produced is incremented by one unit. That is, is the cost of producing one
more unit of good. In general terms, Marginal cost at each level of
production includes an additional costs required to produce the next unit.
For Example: If producing additional vehicles requires building a new

factory, the marginal cost of the extra vehicles includes the cost of the
new factory.

Research paper 1:
"A Study On Marginal Costing in Godrej
Consumer Product Ltd"
Research
paper Name

Author

Date

A STUDY ON
MARGINAL
COSTING IN
GODREJ
CONSUMER
PRODUCT
LTD

S. SIVA; April
MOSES
2013
JOSHUVA
DANIEL;
S.SHALNI

Place

Industry

Source

PUDUCHERY

Conglomerate
(Home
Appliances
etc.)

indianresearchjournals.
Com

Objectives of the Study:

To understand the financial position of the company.

To study the marginal cost of the company.
To analyze the various elements of marginal cost in Godrej Consumer
Products Ltd.
To study the growth and development of Godrej Consumer Products
Ltd.

Research Methodology:
A research design is the arrangement of conditions for collection and
analysis of data in manner that aims to combine relevance to the research
purpose with economy in procedure. This study involves only the
secondary data covering a period of three years between 2009-2012. The
secondary data was collected from company's website for profile,
magazines, articles relating to marginal cost and management tools. The
annual report and cost details provided by the company. Statistical tools
like, Growth Rate, Correlation, T Test were used.
Testing of Hypothesis:
H0:When production quantity increases, assessable value remains same.
H0:When production quantity increases, clearance quantity remains
same.

Abstract:
Marginal Costing is the technique of presenting cost data wherein
variable costs and fixed costs are shown separately for managerial
decision-making. It is simply a method or technique of the analysis of
cost information for the guidance of management which tries to find out
an effect on profit due to changes in the volume of output. The growth
and development of any country is measured in terms of the industrial
development of the country. Industries play a vital role in the
development of a nation's economy. From the critical analysis in this
study, the overall performance of the company with regard to profitability
is satisfactory. The basic objective is to develop the industries so that the
country need not relay upon others for its requirements.

Research Paper 2:
"Estimating the Marginal
Hospitalizations"
Research Paper
Name
Estimating the
Marginal Costs
of
Hospitalizations

Author

Date

Place

Industry

Jason
M.
Sutherl
and,
PhD

June
2012

Vancouv Service
er,
British
Columbi
a

Costs

of

Source
Google ScholarUBC CENTRE FOR
HEALTH SERVICES
AND POLICY
RESEARCH

Objective of the study:

The primary objective of this project is the development of
methodologies to estimate the marginal costs of hospitalizations for
different types of patients. Marginal cost refers to the change in total
hospital expenditures associated with treating one additional patient. This
analysis is limited to hospital-based costs only; post-acute care costs,
clinic visits, prescription drug costs (other than those associated with a
hospital stay) and physician claims are excluded.

Methodology:
1.This analysis assumes that the primary users of the methods and
findings regarding marginal costs of hospitalizations will be provincial
Ministries of health and other significant purchasers of health care
services.
2.This analysis will present the estimates of marginal cost as a percentage
of average cost. The rationale for presenting the results in this format is
based on how provincial Ministries of health examine hospitals costs.
Currently, hospitals costs are compared to the national average cost of
patients with the same clinical profile. CIHI provides this information to
Ministries of health and hospitals; the average costs are represented by
Resource Intensity Weights (RIW).
3. Due to sampling variability, patient heterogeneity and costing
methodology variation within Case Mix Groups (CMG) and
Comprehensive Ambulatory Care Classification System (CACS) groups,
there can be considerable variability in patient costs within the same
clinical group. To reduce the likelihood of inaccurate estimates of
marginal cost, only clinical groups with at least 100 patient
hospitalizations are included in the analysis.

Process:
The analysis proceeds in three segments. In the first, day surgeries are
analyzed. In the second, patients admitted for surgical care are analyzed.
Lastly, patients hospitalized for medical care are analyzed. Separating
hospital care into these three segments permits the underlying
assumptions and interpretation to vary according to the type of care.

Abstract:
Estimating marginal costs of hospitalized patients is complex; hospitals
purchase a broad array of equipment and services to provide care to
patients. This includes nursing care and sophisticated diagnostic and
therapeutic equipment. Accordingly, a range of data sources is required in
order to derive estimates of patients marginal cost. These complementary
datasets include statistical and financial data from hospitals chart of

accounts, activity-based costing data, workforce data and lastly, clinical,

demographic and administrative data abstracted from the patients chart
and submitted to the Canadian Institute for Health Information (CIHI).