Using Differential Analysis to Make Decisions
Read the Chapter 7 introduction, then click "Next Section" to read Section 7.1. Best Boards will use differential revenues and costs to show the difference in revenues and costs among alternative courses of action. Differential analysis is useful in making managerial decisions related to making or buying products, keeping or dropping product lines, keeping or dropping customers, and accepting or rejecting special customer orders. Later in this unit, you will examine each of these four scenarios for which differential analysis can be used to assist managers' decision-making.