Each year, Sunshine Motos surveys 7,500 former and prospective customers regarding

incremental cost analysis

                            survey is done      outsource survey     differential

                            by the company    to Global                   amount

Mailing costs       $16,600                 $0                              ($16,600)

Printing costs      $4,500                  $0                              ($4,500)

Labor costs         $1,500                   $0                              ($1,500)

Outsourcing         $0                         $30,300                    $30,300

costs                                                                                                    

totals                    $22,600                $30,300                   $7,700

The incremental cost of outsourcing the surveys is $7,700. Some of the current costs are unavoidable, e.g. depreciation expense and utilities, so they should not be considered in this analysis. But other costs, e.g. direct labor, are avoidable.

I know that Pat using the computer will increase the company's electric bill by a few dollars, but it would never be $500 (maybe $5). Maybe he even calls a few customers to check some answers, but again this might add $10 to the phone bill. Also, Pat using the computer's mouse or any other equipment might result in it breaking down, but that is not worth $1,500. Since the cost analysis is not specific, it is safer not to include depreciation or utilities.

at any price

Explanation: In simple words, it refers to those stocks that are issued without any face value or par value. The advantage of issuing such stock that the prices are not predetermined by the company, but actually they are ascertained by the investors who are willing to deal with them in the market at issuance.

Therefore, these kinds of stocks are generally issued by the organisation who have competitive advantage over others or are industry leaders as they know that their stock will be priced higher.