What is an incremental cost? An incremental cost is the - TopicsExpress

What is an incremental cost? An incremental cost is the increase in total costs resulting from an increase in production or other activity. For instance, if a companys total costs increase from $320,000 to $360,000 as the result of increasing its machine hours from 8,000 to 10,000, the incremental cost of the 2,000 machine hours is $40,000. The incremental cost is also referred to as the differential cost. The incremental cost is the relevant cost for making a short run decision between two alternatives. Join with us : facebook/groups/caultimates

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