Asked by ashley alvarez on May 22, 2024
Verified
Financial data are developed for a course of action under an incremental basis and then it is compared to data developed under a differential basis before a decision is made.
Incremental Basis
A method of calculating changes in costs or benefits that result from small variations in the quantity of output or input.
Differential Basis
A method of calculating or analyzing the difference in costs or revenues between two alternative actions.
- Comprehend the stages in the managerial decision-making process and the function of accounting.
Verified Answer
FM
Florence muthoniMay 22, 2024
Final Answer :
False
Explanation :
Incremental and differential analysis are essentially the same concept in financial decision-making, both involving the comparison of revenues and costs that change under different alternatives. There is no step where data developed under an incremental basis is compared to data developed under a differential basis as they refer to the same process of analyzing the additional or incremental costs and benefits of one option over another.
Learning Objectives
- Comprehend the stages in the managerial decision-making process and the function of accounting.
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