Home › JAIIB › AFM › Unit 34

JAIIB · Accounting & Financial Management · Module D — Cost Management Accounting and Taxation

JAIIB AFM Unit 34 — Marginal Costing: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 3 of the November 2026 cycle (28 November 2026)

This page is a free slice of our JAIIB AFM question bank for Unit 34 — Marginal Costing (Module D — Cost Management Accounting and Taxation). The Mock Centre holds 57 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

AFM · Module D57 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Marginal cost = cost of producing ONE additional unit (the variable cost of that unit); marginal costing = variable/direct costing (absorption costing is NOT one of its names).
  2. Contribution = Sales − Variable cost (200 − 140 = Rs.60); fixed costs are charged to the PERIOD, not the product.
  3. Semi-variable costs carry both fixed and variable elements; CVP classifies everything into fixed vs variable.

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
Marginal costing is NOT also known as:
Why (c): ABSORPTION (full) costing is its OPPOSITE — loading fixed costs onto units. Marginal costing travels as variable costing/the contribution approach.
Question 2 of 5
Sales price ₹200; variable cost ₹140. The contribution per unit is:
Why (b): 200 − 140 = ₹60 per unit toward fixed costs and profit.
Question 3 of 5
The break-even level is where:
Why (b): At BEP, total contribution exactly equals fixed costs; every unit beyond adds pure contribution to profit.
Question 4 of 5
Absorption costing is also known as:
Why (b): 'Full costing' — because units absorb ALL manufacturing costs.
Question 5 of 5
Which cost behaves as a VARIABLE cost for a bulb manufacturer?
Why (b): Direct material per bulb rises one-for-one with output — the definition of variable cost.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Marginal costAbsorption costVariable only (44) vs + fixed OH share (54)
ContributionProfitSales − variable vs contribution − FIXED
Practise all 57 questions on Unit 34. The free demo opens a slice of every subject with the same explanations; the AFM Online-only pass unlocks all 1,681 AFM questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
Take the free test Open the free demo

← Unit 33: Standard Costing · Unit 35: Budgets and Budgetary Control → · All AFM units · JAIIB 2026 guide

Related reading

Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.