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Unformatted text preview: do change. For example, direct labor, normally a variable cost, is not an incremental cost in deciding between two new factory machines if each asset requires the same amount of direct labor. In contrast, rent expense, normally a fixed cost, is an incremental cost in a decision to continue occupancy of a building or to purchase or lease a new building. Types of Incremental Analysis A number of different types of decisions involve incremental analysis. The more common types of decisions are: 1. Accept an order at a special price. 2. Make or buy. 3. Sell or process further. 4. Retain or replace equipment. 5. Eliminate an unprofitable business segment. 6. Allocate limited resources....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.
- Fall '11