Incremental Costs

Related BrainMass Solutions

• Incremental Analysis - Revenues, Costs and Net Income

  Incremental Revenues = Revenue of B - Revenue of A = 180,000 - 150,000 = $30,000 Incremental Costs = Cost of B - Cost of A = 120,000 - 100,000 = $20,000 Incremental Profit = Incremental Revenue - Incremental Costs = 30,000 - 20,000 = $10,000

• Joint costs

  Freshfields Company should: - further process product A because its incremental revenues will exceed incremental costs by $4,000 - further process product A because its incremental revenues will exceed incremental costs by $14,000 - sell

• What is incremental analysis? Provide an example, using numbers, of how incremental analysis might be used to make business decisions.

  If the result is negative (incremental revenues are less than incremental costs), profit decreases, so do not accept.

• special order problem

  C. incremental revenues will exceed incremental costs by $2,890 D. incremental revenues will exceed incremental costs by $1,290 B.

• Relationship Between Relevant Costs & Incremental Costs

  591949 Relationship Between Relevant Costs & Incremental Costs Please explain the concepts of relevant costs and incremental costs and how do they relate? Provide examples.

• Relevant costs vs. incremental costs: example

  593909 Relevant costs vs. incremental costs: example Discuss the concepts of relevant costs and incremental costs. How do they relate? Provide examples. Relevant costs are those that change with the decision.

• What does Incremental Analysis mean?

  Incremental analysis views only the relevant costs and revenues in a decision, those that will change between alternatives.

• incremental profit and selling price of cost per unit

  =Incremental revenues-Incremental costs A. Incremental revenues= Additional price per unit*Units =(26-20)*100000 =$600000 B.

• Holes Company: Variable Costs

  Incremental Profit / Loss = $40,000 - $22,000 = +$18,000 Product A2 -- Units Produced = 10,000 -- Sales Value As is = $100,000 -- If Processed Further: Sales Value = $108,000 -- Additional Costs = $16,000 Incremental Revenue = $8000 Incremental

• Incremental analysis is quicker - but other advantages?

  But, the real reason for disagreeing is that incremental analysis affords more insight than analyzing all costs of each alternative. The incremental costs show you what changes, either up or down, between alternatives.