Agricultural Engineering 2025 – 400 Free Practice Questions to Pass the Exam

Incremental cost refers to the additional cost incurred when producing one more unit of a good or service. It is crucial for decision-making in agricultural engineering and other fields, as it helps evaluate the financial implications of potential changes in production levels.

In this scenario, the correct answer indicates that the incremental cost is Php 50,000. This suggests that this specific amount effectively represents the additional cost incurred over and above existing expenses when increasing production or making a specific change in an agricultural operation. Understanding incremental costs is vital for making informed decisions about resource allocation, pricing, and production optimization, as it allows managers to assess whether the potential benefits of increasing production would outweigh the additional costs involved.

Other amounts listed do not accurately reflect the specific incremental cost under consideration. They may represent total costs or fixed costs but are not indicative of the additional expenses associated with producing one more unit, which is the essence of incremental cost analysis.