Respuesta :
A correct option is option(d). The stand-alone principle advocates that project analysis should be based solely on Incremental cost.
What does the term incremental cost mean?
The overall expense incurred as a result of producing one extra unit of a product is known as the incremental cost. The cost of an incremental unit of production is calculated by examining the additional costs incurred during the production process, such as raw materials.
How do you calculate the incremental cost?
The price for simultaneously making two things might be $180.00. Calculate the cost difference between producing one unit and making two of them to find the additional cost. $80.00 is the result of subtracting the cost of creating one unit ($100.00) from the total cost of generating two units ($180.00).
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The correct question is:
The stand-alone principle advocates that project analysis should be based solely on which one of the following costs?
A. Sunk.
B. Total.
C. Variable.
D. Incremental.
E. Fixed.
