Multiple choice

Directions: Choose the correct option for the given question.

In differential cost analysis, decisions are taken by comparing the ____ with differential cost.

  1. marginal cost

  2. marginal revenue

  3. incremental revenue

  4. either (2) or (3)

  5. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In differential cost analysis, management compares the incremental (differential) costs of an action against the incremental (differential) revenue generated by that action to determine if it is profitable.

Keep practicing — related questions