20.3.6 - Incremental and Differential Costs
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Practice Questions
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What is an incremental cost?
💡 Hint: Think about costs associated with increasing production.
Give an example of differential costs.
💡 Hint: Look at two different options and how they compare in cost.
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Interactive Quizzes
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What are incremental costs?
💡 Hint: Consider costs that only arise when you make a change.
Is the differential cost relevant in decision making?
💡 Hint: Think about decisions you make based on cost comparisons.
1 more question available
Challenge Problems
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Calculate the incremental costs if a company needs to hire 5 extra employees at ₹30,000 each for a seasonal project, including ₹50,000 in additional materials.
💡 Hint: Add wages and other direct expenses together.
A company is evaluating two software solutions costing ₹1,00,000 and ₹75,000. Calculate the differential cost and discuss how this affects decision-making.
💡 Hint: Compare the features against the cost difference.
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