Incremental Cost: Definition, How to Calculate, and Examples
Incremental cost can be defined as the encompassing changes experienced by a company within its balance sheet because of one additional unit of production. However, the incremental cost cannot always be the same as the average cost per unit due to different (fixed and variable) costs involved. It characterizes the added costs that might not exist if an extra unit was not produced. Analyzing production volumes and the incremental costs […]