Which one of the following is a true statement about incremental analysis?

1. It is another name for capital budgeting.
2. It is the same as CVP analysis.
3. It is used primarily for long-term planning.
4. It focuses on decisions that involve a choice among alternative courses of action.

Answer:

d )

Step-by-Step explanation

Incremental analysis is basically the method which is used in the decision making so that determination of the true cost can be found out between the alternatives.

This is also called relevant cost analysis. Relevant cost is basically used in the managerial accounting. This the is avoidable cost that can be avoided during the process of making business decision. This is also known as the differential cost.

This is a tool used in managerial decision making and play an important part. It is the cost expected cost of the future which is variable in nature.

Thus, the correct answer is d.