Asked by Amanda Herrera on May 22, 2024
Verified
Which of the following is not a true statement?
A) Incremental analysis might also be referred to as differential analysis.
B) Incremental analysis is the same as CVP analysis.
C) Incremental analysis is useful in making decisions.
D) Incremental analysis focuses on decisions that involve a choice among alternative courses of action.
Incremental Analysis
The process of evaluating the financial consequences of choosing one option over another in decision-making.
Differential Analysis
The process of comparing the financial differences between alternative business actions in order to make informed decisions.
CVP Analysis
Cost-Volume-Profit Analysis, a financial tool used to estimate how changes in costs, sales volume, and price affect a company's profit.
- Gain an understanding of the role of incremental analysis in a variety of management decisions, ranging from special orders to equipment replacement and decisions on extra processing tasks.
Verified Answer
HA
Harley ArnoldMay 24, 2024
Final Answer :
B
Explanation :
Incremental analysis and CVP analysis are not the same. CVP analysis focuses on the relationship between costs, volume, and profit, while incremental analysis focuses on comparing the costs and benefits of different options.
Learning Objectives
- Gain an understanding of the role of incremental analysis in a variety of management decisions, ranging from special orders to equipment replacement and decisions on extra processing tasks.