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incremental concept


maddison frechette

on 7 May 2013

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Transcript of incremental concept

Incremental concept The Incremental concept is estimating the impact of a business decision on costs and revenues, stressing the changes in total cost and total revenue that result from changes in prices, products, procedures, investments, or whatever may be at stake in the decision.
The two basic concepts in this analysis are incremental cost and incremental revenue.
1.The change in total cost resulting from a decision.
2.The change in total revenue resulting from a decision. examples:
The skittles company makes 1000 bags of skittles a day, with 20 skittles in each bag. What if one day the machine that counts them were to miss count and put 22 skittles into each bag. How big of a difference do you think that would make in the company??? If just for one day the machine were to miss count by 2 skittles. The skittles company would be able to make 100 bags. now trade papers and have a partner grade it 1…...difference $700 without the sale 1400 with sale 700 2…...old price = 384 new price =448...difference $64 per day 3…...difference is $30 more money one the last day 4…...old price =1350 new price=1800 difference 450 5…..the same Activity Time!!!! Math problems ): BOOM WE'RE DONE
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