The process of evaluating relevant information that changes operating income under alternative courses of action is called ________.

Question

Quizplus · Accepted Answer

Incremental analysis involves evaluating relevant information that changes operating income under alternative courses of action. Cost-benefit analysis is a broader method used to evaluate the costs and benefits of a particular decision or action. CVP analysis is used to predict how changes in costs and volume will impact profits. Opportunity cost analysis evaluates the benefits forgone by choosing one alternative over another. Therefore, incremental analysis is the most appropriate choice for the given description.

The Process of Evaluating Relevant Information That Changes Operating Income