business activity and fixed costs which do not change in relation to business activity. Direct costs can be traced directly to a certain object such as product, activity or department. Indirect costs cannot be traced to a specific product, activity or department within a business. Yet another way that managerial accounting can determine costs is by controllable costs which are directly inuenced by a management decisions within a short period of time. On the other hand if management decisions have no direct influence within a short period of time, it is considered noncontrollable costs. Incremental analysis which is a simplified approach to a number of different short-term decisions usually between two different alternatives that managers must often make. Incremental analysis focuses on three major amounts: revenue differences, cost differences and cost savings differences. (Tanner) Managerial accounting statements will also