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Incremental Cost |
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Incremental Cost The total cost to a company to produce one more unit of a product. The incremental cost varies according to how many more or fewer units a company wishes to produce. Increasing production may increase or decrease the incremental cost because the incremental cost includes all costs such as labor, materials, and the cost of infrastructure. For example, if a widget manufacturer increases the number of widgets it produces, it may need to buy more material, but the costs of labor and factory maintenance remain the same and are spread out over a greater number of widgets. This may reduce the incremental cost. On the other hand, if the manufacturer hires more workers and builds another factory, it will likely increase the incremental cost. It is also known as the marginal cost. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| The survey does not include as a voluntary discloser any company that made no disclosure of perks in its proxy statement, whether that's because the company does not make perks available to its executive officers, the company requires the executive to reimburse the company for the incremental cost of providing the perks or for other reasons. Time passes, a couple of incremental cost savings projects are implemented and, voila, the machine is making more money. Taxpayers can claims deductions for the incremental cost of buying cars propelled by clean-burning fuel. |
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