Incremental Cost

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Dictionary Says

Definition of 'Incremental Cost'

The encompassing change that a company experiences within its balance sheet due to one additional unit of production.


Also referred to as "marginal cost".
Investopedia Says

Investopedia explains 'Incremental Cost'

Incremental cost is the overall change that a company experiences by producing one additional unit of good.

Related Definitions

  • Long Run Incremental Cost - LRIC

    Forward-looking incremental costs that can be accounted for by a company.
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  • Balance Sheet

    A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as ...
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  • Efficiency Principle

    An economic theory that states that the greatest benefit to society of any action is achieved when the marginal benefits from the allocation of resources are equivalent to the marginal ...
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    • Unit Cost

      The cost incurred by a company to produce, store and sell one unit of a particular product. Unit costs include all fixed costs (i.e. plant and equipment) and all variable costs (labor, ...
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