Comparative Analysis: What Is Differential Analysis?

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What is differential analysis?
Differential analysis is the evaluation based on different factors and alternative. Essentially, it is a system or process of comparing two or more business alternatives to each other in an attempt to decide the right choice that could improve the bottom line of a company. In a well-articulated definition, differential analysis, also known as incremental analysis is “The process of analyzing differential revenues and costs from one alternative to another” (Heisinger & Hoyle, 2012, p. 487). So whenever a company reviews its differences in revenues and costs, that company is involved in a differential analysis.
Explain how differential analysis can be successfully employed to make decisions.
There are various way
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Therefore a special order decision is a decision reached by a company whether to make a product for one specific customer or a one-time order with unique specifications. Furthermore, a special order is an order that a company did not anticipate when preparing its yearly budget. Therefore, a special order is an additional opportunity to generate revenue above sales goals. While a special order decision is critical to a company, three essential factors must be taking into consideration. The first consideration is whether the company has the excess capacity to fulfill this order. The second consideration is whether the special order will be profitable for the company, and the third consideration is whether the order will affect planned sales, now or in the future. When these components are readily available, most managers would be open to make a special order decision (Accounting in Focus, n.d.). So, to summarize, a special order decision is simply the consideration by a company to accept or not to accept a unique one-time order made by a
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