The term incremental is by definition the increase in avariable.
When we are comparing two alternatives it refers to the changeor difference between one alternative and another.
Do not use minus (negative) signs in youranswers. Just enter the amount, thedifference.

Anna Company is considering two alternatives. Alternative A willhave sales of $150,000 and costs of $100,000. Alternative B willhave sales of $185,000 and costs of $125,000. Compare alternative Awith alternative B showing incremental revenues, costs, and netincome.

Use the information provided to answer the followingquestions:

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

AnswerAlternative AAlternative B

b) What is the incremental revenue?

$ Answer

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

AnswerAlternative AAlternative B

d) What is the incremental cost?

$ Answer

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

AnswerAlternative AAlternative B

f) What is the incremental net income?

$ Answer