Question

A cost is $34,500 at an activity level of 23,000 units, and $42,000 at an activity level of 28,000 units. What type of cost is this

Answer 1

Answer:

Incremental cost

Explanation:

The incremental cost is the cost that is incurred for increase in the production level that means if the level of the production rises, the cost or an expense also increased. It involves both type of cost i.e. fixed and variable

Therefore in the given situation it is mentioned that

For the activity level of 23,000 units the cost $34,500 is spent

And, for the activity level of 28,000 units the cost $42,000 is spent

So this is an incremental cost