Incremental Analysis - Incremental Analysis Management's...

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Incremental Analysis Management's Decision-Making Process Making decisions is an important management function . Management's decision-making process does not always follow a set pattern, because decisions vary significantly in their scope, urgency, and importance. It is possible, though, to identify some steps that are frequently involved in the process. These steps are shown in Illustration 23-1 . Illustration 23-1 Management's decision-making process Accounting's contribution to the decision-making process occurs primarily in Steps 2 and 4— evaluating possible courses of action, and reviewing the results. In Step 2, for each possible course of action, accounting provides relevant revenue and cost data. These show the expected overall effect on net income. In Step 4, accounting prepares internal reports that review the actual impact of the decision. In making business decisions, management ordinarily considers both financial and nonfinancial information. Financial information is related to revenues and costs and their effect on the
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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.

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Incremental Analysis - Incremental Analysis Management's...

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