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.

## 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:

1. First, determine the change in variable costs (\$). The change in variable costs (\$) is given as 130.
2. Next, determine the change in quantity produced. The change in quantity produced is provided as 30.
3. 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)