Procter & Gamble Co. is using Marginal Cost Accounting and Activity-Based Costing for its product lines:

Requirements:

• Calculate the Marginal Cost of producing an additional unit for a specific product:
  • Variable Costs: $5 per unit
  • Fixed Costs: $2 per unit

• Implement ABC to allocate marketing and distribution costs.
• Compare the unit cost under Marginal Cost Accounting and ABC.
• Evaluate the advantages of ABC over Marginal Cost Accounting in consumer goods manufacturing.
• Discuss how Standard Cost Accounting could improve cost control and profitability analysis.

Cost Calculation (Marginal Cost Accounting):

Category	Amount per Unit ($)
Variable Costs	$5
Fixed Costs	$2
Total Cost per Unit	$7