Assessment Description:

Incremental analysis is used to help companies make decisions involving a choice among alternative courses of action. People use incremental analysis in their own personal decision making as well. Provide a hypothetical example from your personal life of how you might use incremental analysis in making a decision.

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SOLUTION to ACC 240: Fundamentals of Accounting- Topic 7 DQ 1.

Hello class,

After conducting research on how different companies utilize incremental analysis, I realized that as an Emergency Room (ER) nurse and nursing student, there are instances where I find myself applying incremental analysis to various aspects of my life, both personal and professional. One hypothetical example where I might use this decision-making tool is when considering whether to pursue an advanced nursing degree, such as a Master of Science in Nursing (MSN). In this scenario, As a first step, I would clearly define the costs and returns linked to achieving an MSN in contrast with my existing level of education. The incremental costs would include fees, books, possible loss of earnings, and time spent in studying. On the plus side, there is the possibility of salary raise, wider job options, and increased knowledge as well as skills that would be helpful in handling out the patients.

Further, I would then analyze these factors incrementally. For instance, if the MSN program costs $30,000 and takes two years to complete, I would calculate the annual cost of $15,000. Then, I would compare this to the potential salary increase, which might be around $20,000 per year based on industry averages (AACN, 2019). Over time, the incremental benefits would outweigh the costs. However, the analysis would not stop at financial considerations. I would also consider the intangible aspects like increased morale of working on the job and providing superior care to patients. While such advantages are not as easy to measure financially, they go a long way towards influencing the decision making process.

Thus, by systematically evaluating those incremental costs and benefits, I believe I could make a more rational decision as to whether or not I should pursue an MSN. This approach aligns with the principles of incremental analysis in managerial accounting, demonstrating how this tool can be applied to personal decision-making in healthcare careers (Krishnan & Krishnan, 2023).

References

American Association of Colleges of Nursing (AACN). (2019). Fact Sheet: The Impact of Education on Nursing Practice. https://www.aacnnursing.org/news-data/fact-sheets

Joshi, S., & Krishnan, R. (2023). Managerial accounting and decision-making. Handbook of Financial Decision Making, 277-295. https://doi.org/10.4337/9781802204179.00026