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Introduction
To find incremental revenue and cost, we subtract Current revenue and cost from Projected revenue and cost.
Answer
Current Situation | Projected Sales and Profit | Incremental Revenues and Costs | |
Total Revenue | Php1,500,000 | Php1,800,000 | + Php3000,000 |
Variable Cost | 575,000 | 425,000 | - Php 332,000 |
Direct Fixed Costs | 625,000 | 700,000 | + Php 75,000 |
Indirect Fixed Costs | 100,000 | 100,000 | No change |
Profit | Php 200,000 | Php 575,000 | + Php 375,000 |
Profit increases by Php 375,000, thus a new camera and coffee maker must be purchased.
