Differential cost: The difference between the costs of two alternatives is considered as a differential cost. It is the increase in the business cost because of preferring a specific alternate over another. Explain the given statement regarding the variable costs and differential costs.

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Chapter 6, Problem 6.5Q

To determine

Concept Introduction:

Differential cost:

The difference between the costs of two alternatives is considered as a differential cost. It is the increase in the business cost because of preferring a specific alternate over another.

Explain the given statement regarding the variable costs and differential costs.

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