Enter the price per unit ($), the cost per unit ($), and the number of units into the calculator to determine the Incremental Profit.
Incremental Profit Formula
The following formula is used to calculate the Incremental Profit.
IP = (PPU – CPU) * U
- Where IP is the Incremental Profit ($)
- PPU is the price per unit ($)
- CPU is the cost per unit ($)
- U is the number of units
How to Calculate Incremental Profit?
The following example problems outline how to calculate Incremental Profit.
Example Problem #1
- First, determine the price per unit ($). In this example, the price per unit ($) is given as 600 .
- Next, determine the cost per unit ($). For this problem, the cost per unit ($) is given as 300 .
- Next, determine the number of units. In this case, the number of units is found to be 20.
- Finally, calculate the Incremental Profit using the formula above:
IP = (PPU – CPU) * U
Inserting the values from above yields:
IP = (600 – 300) * 20 = 6000 ($)
Example Problem #2
The variables needed for this problem are provided below:
price per unit ($) = 150
cost per unit ($) = 40
number of units = 15
Entering these values and solving gives:
IP = (150-40) * 15 =1650 ($)
