Incremental Analysis
What is the purpose of accepting an order at a special price?
A) To make more profit.
B) To attract more customers.
C) To reduce inventory.
What does non-financial information include?
A) Revenues and costs
B) Employee turnover
C) The environment
Relevant cost: that have alredy been incurred and will not be changed or avoided by any present or futur decisions(T/F)
True
False
Potential benefit: that may be obtained from not following an alternative course of action.(T/F)
True
False
2. Make or buy component parts or finished products:
A car manufacturer deciding whether to produce car parts in-house or purchase them from a supplier.
1. Accept an order at a special price:
A bakery deciding whether to sell freshly baked bread or use it to make sandwiches.
3. Sell or process them further:
A restaurant offering a discounted meal for a limited time.
What are the important concepts used in incremental analysis?
Relevant cost
Opportunity cost
Sunk cost
All the above
The first step in Management's Decision-Making Process Identify the problem and assign responsibility. (T/F)
True
False
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