Marginal Cost of Production Template
Marginal Cost of Production Template
This marginal cost of production template will show you how to calculate different types of marginal costs.
This is what the marginal cost of production template looks like:
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The Marginal Cost of production is the cost to provide one additional unit of a product or service. It is a fundamental principle to derive economically optimal decisions and an important aspect of managerial accounting and financial analysis. It can be calculated as:
Marginal Cost = Change in Cost / Change in Quantity
If a company’s total cost of production is defined as:
TC = FC + (VC x Q)
Then its marginal cost is the first-order derivative of the total cost function. In this case, the marginal cost is directly equal to its variable costs.
MC = dTC / dQ = VC
where:
TC: Total Cost
FC: Fixed Cost
Q: Quantity
VC: Variable Cost
MC: Marginal Cost
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