Your Daily Bread, Inc., is a large chain of franchised restaurants specializing in soup and sandwich lunches. Management is attempting to determine whether or not to introduce dinner-size salads into its product mix. The most appropriate form of analysis for this decision is known as:
A) Incremental analysis.
B) Cost-volume-profit analysis.
C) Business case analysis.
D) Gap analysis.

Question

Quizplus · Accepted Answer

Incremental analysis is the most appropriate form of analysis for determining whether to add a new product to the product mix. It involves comparing the additional revenues that the new product is expected to generate against the additional costs of producing and selling the product.