Incremental Analysis and Cost Volume Profit Analysis ...

Management Accounting | 175. Incremental Analysis and cost Volume Profit Analysis : special applications Incremental Analysis is a flexible decision-making tool that may be used in making many different kinds of decisions. Some of the decisions for which Incremental Analysis is appropriate include the following: 1. Open a new territory 2. Sell on credit 3. Sales people compensation 4. Additional Volume of business These four items are marketing decisions that may be made in The Management/. Accounting Simulation. Consequently, Incremental Analysis is an important decision-making tool in this simulation.

178 | CHAPTER TEN • Incremental Analysis and Cost Volume Profit Analysis: Special Applications The above analysis reveals the following: 1. At the sales volume range of 50,000 - 150,000 the territory is not profitable. 2. At a volume of 200,000 or greater the territory appears to be profitable.

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