Incremental Cost What Is It, Example, Formula
It’s calculated by analyzing the additional expenses incurred based on the addition of the unit. Incremental costs may be classified as relevant costs in managerial accounting. From the above information, we see that the incremental cost of manufacturing the additional 2,000 units (10,000 vs. 8,000) is $40,000 ($360,000 vs. $320,000). [...]