Incremental revenues and incremental costs are used when:
A) derivatives are too complicated.
B) revenues and costs are unknown.
C) managerial decisions involve substantial changes.
D) a decision is to be presented to a nontechnical audience.
E) managerial decisions involve infinitesimal changes.

Question

Quizplus · Accepted Answer

Incremental revenues and incremental costs are used when managerial decisions involve substantial changes, such as introducing a new product line, expanding operations, or changing the pricing strategy. It helps in determining the potential impact of the decision on the company's profitability by analyzing the additional revenues and costs that will result from the change.

Incremental Revenues and Incremental Costs Are Used When