Enter the change in variable costs ($) and the change in quantity produced into the Incremental Cost Calculator. The calculator will evaluate and display the Incremental Cost.
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Incremental Cost Formula
The following formula is used to calculate the Incremental Cost.
IC = dVC / dQ
- Where IC is the Incremental Cost ($/unit)
- dVC is the change in variable costs ($)
- dQ is the change in quantity produced
How to Calculate Incremental Cost?
The following example problems outline how to calculate Incremental Cost.
Example Problem #1:
- First, determine the change in variable costs ($). The change in variable costs ($) is given as 130.
- Next, determine the change in quantity produced. The change in quantity produced is provided as 30.
- Finally, calculate the Incremental Cost using the equation above:
IC = dVC / dQ
The values given above are inserted into the equation below:
IC = 130 / 30 = 4.33 ($/unit)
Example Problem #2:
The variables needed for this problem are provided below:
change in variable costs ($) = 200
change in quantity produced = 50
Entering these values and solving gives:
IC = 200 / 50 = 4 ($/unit)
