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