The owner of a small retail business asks,"Why do I need cost accountants? My CPA produces financial statements,which are sufficient for me to discover my costs.Look at my Income Statement.I expect sales to increase by 10% next year,so I am planning on a 10% increase in profits.I don't need a cost accountant to tell me that."

Use your knowledge of the concept of differential costs and explain why a cost accountant would question the conclusion that a 10% increase in sales would yield a 10% increase in profit.

Question

The owner of a small retail business asks,"Why do I need cost accountants? My CPA produces financial statements,which are sufficient for me to discover my costs.Look at my Income Statement.I expect sales to increase by 10% next year,so I am planning on a 10% increase in profits.I don't need a cost accountant to tell me that."

Use your knowledge of the concept of differential costs and explain why a cost accountant would question the conclusion that a 10% increase in sales would yield a 10% increase in profit.

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The Answer of The owner of a small retail business asks,"Why do I need cost accountants? My CPA produces financial statements,which are sufficient for me to discover my costs.Look at my Income Statement.I expect sales to increase by 10% next year,so I am planning on a 10% increase in profits.I don't need a cost accountant to tell me that."

Use your knowledge of the concept of differential costs and explain why a cost accountant would question the conclusion that a 10% increase in sales would yield a 10% increase in profit.

The Owner of a Small Retail Business Asks,"Why Do I