The economic significance of marginal cost: as a method of management accounting, marginal cost has obvious advantages: it does not rely on estimation, assumption and prediction to calculate unit cost, and production cost only includes variable cost, which can accurately reflect how enterprises happen in practice; Compared with absorption cost method, sales volume is directly related to profit, which can reflect actual profit more accurately. Because fixed costs have nothing to do with the increase or decrease of output, it is very useful for decision makers not to consider fixed costs when increasing or decreasing output within the maximum range of existing fixed costs. The cost calculated by marginal costing and the accounting report compiled are easier to understand than the absorption cost method.

Extended data:

The relationship between costs:

The relationship between short-term cost curves Using the U-shaped characteristics of MC curve determined by the law of diminishing marginal returns, we can get some relationships of short-term cost curves: ① the relationship between TC curve, TVC curve and MC curve. Because the slopes of TC curve and TVC curve of each yield point are equal, the MC value of each yield point is the slope of the corresponding TC curve and TVC curve. Under the law of diminishing marginal returns, when MC curve gradually changes from decline to rise, correspondingly, the slopes of TC curve and TVC curve also change from decline to rise. When MC curve reaches the minimum at point A, TC curve and TVC curve have two inflection points B and C respectively. ② The relationship among AC curve, AVC curve and MC curve. Firstly, the relationship between AC curve and MC curve is analyzed. U-shaped AC curve and U-shaped MC curve intersect at the lowest point D of AC curve. Before the falling stage of AC curve, that is, before point D, MC curve is below AC curve, and after the rising stage of AC curve, that is, after point D, MC curve is above AC curve. The reason for this feature is that for any two corresponding marginal quantities and average quantities, as long as the marginal quantity is less than the average quantity, the marginal quantity will lower the average quantity, and as long as the marginal quantity is greater than the average quantity, the marginal quantity will raise the average quantity, so when the marginal quantity is equal to the average quantity, the average quantity will inevitably reach its own extreme point. Another important feature is that the change of MC curve is faster than that of AC curve, whether it is down or up. This is because the marginal cost MC is much more sensitive to the change of output than the average cost AC, so the change of MC curve is faster than that of AC curve, whether it is decreasing or increasing. Then the relationship between AVC curve and MC curve is analyzed. The u-shaped AVC curve and the u-shaped MC curve intersect at the lowest point f of the AVC curve. Before the falling stage of AVC curve, that is, before point F, MC curve is below AVC curve, and after the rising stage of AVC curve, that is, after point F, MC curve is above AVC curve. Moreover, whether it is down or up, the change of MC curve is faster than that of AVC curve.