An amount of additional cost incurred for any particular activity is classified as

A. incremental cost

B. differential cost

C. dependent cost

D. independent cost

Answer: Option A

Solution(By Examveda Team)

An amount of additional cost incurred for any particular activity is classified as incremental cost. Incremental cost also referred to as marginal cost, is the total change a company experiences within its balance sheet or income statement due to the production and sale of an additional unit of product. Incremental costs may be classified as relevant costs in managerial accounting.