Incremental analysis is most useful
A) in developing relevant information for management decisions.
B) in choosing between capital budgeting methods.
C) in evaluating the master budget.
D) as a replacement technique for variance analysis.

Question

Quizplus · Accepted Answer

Incremental analysis is primarily used to develop relevant information for management decisions. It involves analyzing the costs and revenues associated with potential alternatives in order to identify the best course of action. This makes it a valuable tool for decision-making processes such as pricing, product mix, and whether to make or buy a product. While incremental analysis may be used in other contexts, such as evaluating the master budget, its primary utility is in providing information for management decisions.

Incremental Analysis Is Most Useful