Marginal costing focuses on variable costs and contribution margins to make decisions. It excludes fixed costs which do not change with production volume. The key concepts include contribution, break-even point, margin of safety, and relevant costs and revenues for decision making. Marginal costing is useful for pricing, product mix optimization, make-or-buy decisions, and other situations involving incremental costs and revenues. Case studies are provided to illustrate how to apply marginal costing principles to different business decisions.