Based on your reading of Chapter 12, please discuss the significance of the following statement with...
Based on your reading of Chapter 12, please discuss the
significance of the following statement with respect to identifying
relevant revenues and cost and performing incremental (or
differential) analysis?
"If it doesn't change, it doesn't
matter."
Homework Answers
In context of the statement given it would be appropriate to say that for given alternatives if the comparable costs do not differ than they are not relevant for decision making. Thus for statement to hold true there must be mutually exclusive options (alternative action) for making a decision. And the costs between them which are comparable should be different in amount thus making them relevant to be considered for decision making.
So 'If a cost doesn't change between alternatives, it doesn't matter' for making decision of choosing between two alternatives.
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