IntroductionThe document contained has been prepared with the aim of developing the three different costing methods, namely total/absorption costing, variable/marginal costing and based on accounting activity. The first part of the report seeks to define and illustrate costing methods based on the writer's personal understanding gained through classroom lessons and academic readings. The second part of the report takes the form of a short essay, critically written to evaluate the application of standard costing and variance analysis to any size business, and concludes with a verdict that if standard costing analysis and the variance is applicable or not to each company with consideration of the costs and benefits of the system.1.0. Part B – Costing methods1.1. Marginal/variable costThe term "marginal" is widely used and known in economics and means "extra", while from an economic point of view the marginal cost is the cost of producing each additional unit; however, “marginal” accounting terminology defines the cost incurred for production as different from its fixed cost which is the marginal cost. Simply, no technique is applied unless it serves the benefits and the marginal cost is used by the firms for the recorded benefits. Among all its advantages, the main advantage it offers is that it attempts to distinguish fixed costs from variable costs, and the method only considers the relevant variable costs to be included in the production cost and the fixed costs are then subsequently deducted to ascertain the profit net. Year-end inventories are also valued on the basis of variable cost. With all these advantageous features of the said system, companies using marginal costing are clearly aware of its… middle of paper… pp. 490-497. Rishinek, A., 1983. Standard cost control aspects: variance analysis, inflation adjustment, learning curve and their computer applications. Managerial Finance, 9(1), pp. 2-6pm. Sulaiman, M. b., Nik Ahmad, N. N. & Alwi, N., 2004. Management accounting practices in selected Asian countries: a literature review. Managerial Auditing Journal, 19(4), pp. 493-508. Sulaiman, M., Nik Ahmad, N.N. & Alwi, N.M., 2005. Is standard costing obsolete? Empirical evidence from Malaysia. Managerial Auditing Journal, 20(2), pp. 109-124. Talbott, J., Brack, L. & Lee, J., 1988. Analysis of variance in a service firm. Strategy and Leadership, 16(3), pp. 36-40.Zoysa, A.D. & Herath, S.K., 2007. Standard costs in Japanese companies: re-examining its meaning in the new manufacturing environment. Industrial Management and Data Systems, 107(2), pp. 271-283.