The original cube with 3-inch edge has the surface area of 6*(3*3) = 6*9 = 54 square inches. When cut into 27 1-inch cubes, it generates 27 small cubes with the surface area of 6*1*1 = 6 square inches each. So the total surface area for all 27 cubes is 27*6 = 162 square inches. The percent of increase is= 200%.