Long run incremental cost (LRIC)

Long run incremental cost (LRIC),

Definition of Long run incremental cost (LRIC):

1. Long run incremental cost (LRIC) refers to the changing costs that a company can somewhat foresee. Examples of long-run incremental costs include energy and oil price increases, rent increases, expansion costs and maintenance expenses.

2. The changes to incremental costs that organizations are able to predict and account for. Examples of long run incremental costs include energy, maintenance, growth, and increased rent, etc.

3. Long run incremental cost (LRIC) is a forward-looking cost that a company needs to include in its accounting. Long run incremental costs are gradual costs a company is able to predict and plan for over the long term.