Category Archive for: Incremental Analysis

Make or Buy Decisions

In many manufacturing operations, a company must decide whether to produce a certain part required in the assembly of its finished products or to buy the part from outside suppliers. If the company is currently producing a part that could be purchased at a lower cost from outsiders, profits may be increased by a decision to buy the…

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INCREMENTAL ANALYSIS IN COMMON BUSINESS DECISIONS

Let us now see how incremental analysis can be used in a variety of business decisions. Special Order Decisions Companies sometimes receive large special orders to provide merchandise at less than the regular price. Typically, these orders are not from a company’s regular customers. To illustrate, assume that Par Four manufactures golf balls that it distributes exclusively…

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THE CONCEPT OF RELEVANT COST INFORMATION

Kevin Anderson is a sophomore at the University of Minnesota in Minneapolis. Following the most brutal winter ever recorded in the state’s history. Anderson is faced with an extremely important decision: Should he drive to Miami for spring break. or should he fly? If he drives. he will leave on Saturday, stay in a· roadside motel Saturday night.…

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Incremental Analysis

ASIA’S CAR TROUBLE The perfect market. That’s how the world’s carmakers viewed Asia until just a few months ago. Rising incomes, hundreds -t millions of potential buyers-the ingredients seemed in place for the biggest car buying binge in automotive history. The Japanese, Europeans, Americans, and Koreans a/l rushed to get in on the bonanza b fore it was…

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