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Differential cost refers to the difference in total costs that arise when comparing two alternative courses of action. It is used in decision-making to evaluate the financial impact of choosing one option over another, helping businesses determine which alternative will result in lower costs or higher profits. Differential costs can be either positive or negative, depending on whether the alternative leads to increased or decreased expenses.

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4mo ago

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What is the word for different cost?

The term "differential cost" refers to the difference in cost between two alternatives. It is often used in decision-making processes to evaluate the financial impact of choosing one option over another. In a broader sense, "variable cost" can also refer to costs that change with the level of production or activity.


What is a differential cost?

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