For which of the following decisions is incremental analysis NOT appropriate?
A)elimination of an unprofitable segment
B)determining cost behaviour
C)a make or buy decision
D)an allocation of limited resource decision

Question

Quizplus · Accepted Answer

Incremental analysis involves comparing the costs and benefits of a specific decision option with the costs and benefits of the status quo. Determining cost behavior is not a specific decision option and therefore not appropriate for incremental analysis. It is a process of analyzing historical costs to determine how they respond to changes in activity levels.

For Which of the Following Decisions Is Incremental Analysis NOT