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

To calculate incremental cost, divide the change in variable costs by 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)