Question
Arrange the following items in correct sequence in which they are shown in Marginal cost statement :
A. Variable cost
B. Profit
C. Contribution
D. Sales
E. Fixed cost
Choose the correct answer from the options given below :
This question was previously asked in
CUET PG 2026 Agri-Business Management Question Paper (25-Mar-2026) (Shift 2)
The correct answer is
D, A, C, E, B
Marginal Cost Statement Sequence
Understanding the structure of a Marginal Cost statement is key to correctly sequencing the given items. This statement, often used in cost accounting and CVP (Cost-Volume-Profit) analysis, typically starts with sales revenue and deducts costs to arrive at profit.
Correct Order of Items
The standard sequence in a marginal cost statement is as follows:
- Sales (D): This is the starting point, representing total revenue.
- Less: Variable Costs (A): Costs that vary directly with production or sales volume are deducted next.
- Equals: Contribution Margin (C): The amount remaining after deducting variable costs from sales. It contributes towards covering fixed costs and generating profit.
- Less: Fixed Costs (E): Costs that do not change with the volume of activity are deducted from the contribution margin.
- Equals: Profit (B): The final result after deducting fixed costs.
Final Sequence
Therefore, the correct sequence for the items in the Marginal Cost statement is:
Sales (D) → Less: Variable Cost (A) → Equals: Contribution (C) → Less: Fixed Cost (E) → Equals: Profit (B)
This corresponds to the sequence: D, A, C, E, B.
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