Dragon LLP is considering two alternatives. Alternative A will have sales of $150,000 and costs of $100,000. Alternative B will have sales of $185,000 and costs of $125,000. Compare alternative A with alternative B showing incremental revenues, costs, and net income.

a) Is sales revenue higher under Alternative A or Alternative B?

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b) What is the incremental revenue?

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c) Is total cost higher under Alternative A or Alternative B?

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d) What is the incremental cost?

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e) Is net income higher under Alternative A or Alternative B?

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f) What is the incremental net income?

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