September 2011
Intermediate to advanced
426 pages
10h 7m
English
book
ACCOUNTING PRINCIPLES: Problem Solving Survival Guide, Volume 2: Chapters 13-26, 10th Edition
by Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Content preview from ACCOUNTING PRINCIPLES: Problem Solving Survival Guide, Volume 2: Chapters 13-26, 10th EditionBecome an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
CHAPTER 26
INCREMENTAL ANALYSIS AND CAPITAL BUDGETING
OVERVIEW
When managers have alternative courses of action, they choose the alternative which best fits the profit and/or other objectives of the business. In order to make the best decision, management should analyze the “differentials” of the various alternatives. That is, management should analyze the difference between revenue and cost factors that each alternative would produce. This type of analysis, known as incremental (differential) analysis, is discussed in this chapter.
Capital expenditures have a continuing impact on a company for an extended period of time. Because of this continuing impact, any decision to allocate a substantial amount of assets is a critical business decision. Proposed alternative capital expenditures should be compared on the basis of their profitability. We also discuss capital budgeting techniques in this chapter.
SUMMARY OF STUDY OBJECTIVES
- Identify the steps in management's decision-making process. Management's decision-making process is: (a) identify the problem and assign responsibility, (b) determine and evaluate possible courses of action, (c) make the decision, and (d) review the results of the decision.
- Describe the concept of incremental analysis. Incremental analysis identifies financial data that change under alternative courses of action. These data are relevant to the decision because they will vary in the future among the possible alternatives.
- Identify the relevant costs in accepting ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.