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Marginal Costing

  • Thread starter SpringbokSupporter
  • Start date
S

SpringbokSupporter

Member
In the glossary for the definition of overheads, there is a term called "marginal costing" which is introduced. From what I can understand, it's a way of pricing a contract without allowing for a contribution to overheads and is done for competitive reasons. However, won't this result in losses for the insurer as it will be unable to meet its overheads?
 
yes it would lead to losses if the company only sold that product. However if the company sold multiple products then the other products could be used to cover the overheads.
 
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