Question

An incremental cost is A. a cost that has already been incurred B. always related to fixed costs C. the difference in total costs between two alternatives D. an additional total cost for an activity

Answer 1

D. an additional total cost for an activity

Step-by-step explanation:

Incremental costs are the additional cost associated with taking a particular action. It is the differential costs that would result from undertaking a certain project. Incremental cost may be described as the marginal costs that result from the production or sales of an extra unit.

A business planning and analysis team will always consider the incremental costs before undertaking a particular activity. An analysis of incremental cost help ascertains the viability of a project or a business unit. A firm will make losses if the incremental cost exceeds incremental revenue.