The term incremental is by definition the increase in a variable. When we are comparing two alternatives it refers to the change or difference between one alternative and another. Do not use minus (negative) signs in your answers. Just enter the amount, the difference.

Anna Company is considering two alternatives. Alternative A will have sales of $150,000 and costs of $100,000. Alternative B will have sales of $185,000 and costs of $125,000. Compare alternative A with alternative B showing incremental revenues, costs, and net income.

Use the information provided to answer the following questions: show your work.

a) Is sales revenue higher under Alternative A or Alternative B?

b) What is the incremental revenue?

c) Is total cost higher under Alternative A or Alternative B?

d) What is the incremental cost?

e) Is net income higher under Alternative A or Alternative B?

f) What is the incremental net income?