Incremental analysis would not be appropriate for
A) a make or buy decision.
B) an allocation of limited resource decision.
C) elimination of an unprofitable segment.
D) analysis of manufacturing variances.

Question

Quizplus · Accepted Answer

Incremental analysis is used for evaluating the incremental costs and benefits of alternative choices. Manufacturing variances analysis requires a detailed analysis of all cost components of production, such as direct materials, direct labor, and overhead costs, and therefore, the incremental analysis approach would not be appropriate. A make or buy decision, an allocation of limited resource decision, and elimination of an unprofitable segment would require incremental analysis to evaluate the costs and benefits of alternative choices.

Incremental Analysis Would Not Be Appropriate for