Mangerial Decisions

Managerial decisions are based on financial and nonfinancial information.   Incremental analysis is used to understand the financial information needed for decision making. It identifies the relevant revenues and costs and the expected impact on future income.   Although both incremental and comprehensive analyses can be utilized making decisions in the workplace environment, the incremental analysis is considered more economical, while remaining just as effective as comprehensive analysis.   In this paper we will evaluate the economic value and impact of utilizing incremental analysis versus a comprehensive analysis.
The incremental analyses assist 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 incremental analysis is an important and standardized approach. The incremental analysis is also a critical and time saving tool that leads in an efficient method in identifying the possible results of decisions on future earnings in making better decisions regarding the productivity of the company. According to the text an incremental analysis sometimes involves changes that at first glance might seem contrary to a business. For example, sometimes variable costs do not change under the alternative courses of action. Also, sometimes fixed costs do change. For example, direct labor, normally a variable cost, is not an incremental cost in deciding between two new factory machines if each asset requires the same amount of direct labor. In contrast, rent expense, normally a fixed cost, is an incremental cost in a decision to continue occupancy of a building or to purchase or lease a new building. (Kimmel, 2011).
Incremental analysis is an approach used to make economic decisions.   After reviewing two or more situations, the more cost saving opportunities is chosen.   Although, it is more widely used in business,...