ACC212Chap26 - Chapter 26 INCREMENTAL ANALYSIS Many...

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Chapter 26 INCREMENTAL ANALYSIS Many managerial decisions involve a choice among alternative courses of action. A primary objective of accounting is to provide management with analyses and reports that will be useful in resolving current problems and in planning for the future. Incremental analysis provides management with data on the differences between total revenues and/or total costs associated with alternative courses of action. Incremental Analysis (a/k/a Differential Analysis) When management is faced with alternative courses of action, management must have all the financial data relevant to the decision in order to make the best possible choice. For instance, if Alternative A is chosen, the resulting revenues and/or costs would be X. If Alternative B is chosen, the resulting revenues and/or costs would be Y. Based on decisions made, different results can be expected. Incremental analysis is the process used to identify the financial data that change under alternative courses of action
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This note was uploaded on 04/07/2008 for the course ACC ACC212 taught by Professor Prescott during the Spring '08 term at S. Alabama.

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