Incremental cost, Financial Management

Incremental Cost

The measured change in a firm's cost of production due to an additional activity pursued by the firm. Incremental costs can be measured by the cost difference among two business alternatives, or it added cost a firm must incur to expand its operations.  In the first case, the incremental costs would equal the difference among the production costs of two like products that differ on the basis of features only. In the second case, the incremental cost would be a measure of the cost of buying a new piece of equipment relative to the revenue that new piece of equipment enabled the firm to generate.

Posted Date: 10/17/2012 2:50:48 AM | Location : United States







Related Discussions:- Incremental cost, Assignment Help, Ask Question on Incremental cost, Get Answer, Expert's Help, Incremental cost Discussions

Write discussion on Incremental cost
Your posts are moderated
Related Questions
Q. What do you signify by Receivables Management? Ans. Receivable Management: - The term receivables refer to debt outstanding to the firm by the customers resulting from sale

We can measure the convexity with the help of following formula:                                                                              ...Eq. (4) Where,          Δ

AGENCY THEORY An agency relationship may be defined as a contract under which one or more people (the principals) hire another person (the agent) to perform some services on th

Q. What is FV of a Single Present Cash Flow? the future value of a single cash flow is defined in term of equation as follows: FV = PV (1 + r)n Where, FV = Future value PV = Pr

The managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch. Company A; has deliberately paid no dividends for th

Syntax of Accounting Procedure The general accounting practices are: (a)  Do not consider any income or gain till the similar is realised in cash; (b)  Create or make pr

Foreign Exchange Rates The proportional value of one currency to other, used to exchange currency from one denomination to another.  For example, one British pound is wort

Commercial Paper (CP) is a short-term unsecured promissory note issued in the open market. It also represents the obligation of the issuer. Normally, it is issued

What is trustworthy collateral from the lenders' perspective?Explain whether accounts receivable and inventory are trustworthy collateral. Assets that are readily marketable of

Financial Repor ting The process of preparing the corporation's financial statements in accordance with generally accepted accounting principles. The statements prepare