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Incremental cost accounting is a method used in managerial accounting to analyze the costs associated with a specific decision. It focuses on identifying the additional

Incremental cost accounting is a method used in managerial accounting to analyze the costs associated with a specific decision. It focuses on identifying the additional costs that will be incurred as a result of choosing one alternative over another.
In incremental cost accounting, only the costs that change as a direct result of the decision under consideration are taken into account. This approach helps management make informed decisions by comparing the incremental costs and benefits of different alternatives.
**Objective Question:**
Which of the following statements best describes incremental cost accounting?
A) It considers only fixed costs when analyzing decisions.
B) It focuses on identifying the additional costs that result from a specific decision.
C) It ignores all costs associated with a decision.
D) It primarily deals with historical costs.
Choose the correct option:
A) A
B) B
C) C
D) D

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