Answer:
$4,000
Explanation:
Scholastic's Eastern Tour Western Tour
Projected revenue $17,000 $19,000
Variable costs ($3,000) ($7,000)
Fixed costs ($3,000) ($3,000)
Profit $11,000 $9,000
The incremental costs of the Western Tour is:
incremental costs = costs associated to western tour - costs associated to the alternative eastern tour = ($7,000 + $3,000) - ($3,000 + $3,000) = $10,000 - $6,000 = $4,000
Incremental costs are the costs that a company incurs in by taking a particular action or making a particular decision, always compared to not taking that particular action or making that decision.
