Asked by Grace Mackosso on May 25, 2024
Verified
A complete income statement need not be prepared as part of a differential cost analysis.
Differential Cost Analysis
The process of comparing the difference in cost between two alternative decisions to find out which is more beneficial.
Income Statement
A financial statement that reports a company's financial performance over a specific period, including revenues, expenses, and profits or losses.
- Absorb the concept of differentiating between necessary and unnecessary expenses in decision-making activities.
Verified Answer
CR
Candice RobinsonMay 29, 2024
Final Answer :
True
Explanation :
Differential cost analysis only focuses on the incremental costs and benefits of two or more alternatives, therefore a complete income statement is not necessary.
Learning Objectives
- Absorb the concept of differentiating between necessary and unnecessary expenses in decision-making activities.