Incremental vs. Comprehensive Analysis
ACC/561
University of Phoenix
Making accurate managerial decisions based on a business’s financial and nonfinancial information are important. To understand the financial information necessary for making correct decisions it is helpful to create an incremental analysis. The incremental analysis identifies the relevant revenues and costs and the expected impact on future income. Although both incremental and comprehensive analysis can be utilized making decisions in the workplace environment, the incremental analysis is considered more economical while remaining just as effective as a comprehensive analysis. In this paper, we will evaluate the economic value and impact of utilizing incremental analysis versus a comprehensive analysis.
The incremental analysis assists in making important decisions, contributing the highest resolution while remaining accurate and cost effective. When determining different and various business decisions regarding cost and revenue, the …show more content…
There is no distinct rule or pattern a manager follows because decisions are based on an instant obligation, which coincides with the requirement at hand that may vary depending on various factors. Accounting’s contributions to a manager’s decision-making process cannot be overstated as it provides many resources to support a process. It resolves issues and provides forecast information to project occurrences, provide mitigation analysis and financial assessments and data to support the operational requirements for leadership in numerous organizations throughout the world. Company management uses managerial accounting information to determine what should be sold and how to sell it, and to focus on which products would be more profitable to sell by the utilizations of Relevant Costing Analysis and Activity Based Costing