ACCOUNTING PRINCIPLES 122 5/16 >C<
ACCOUNTING PRINCIPLES 122 5/16 >C<
17th Edition
ISBN: 9781323461471
Author: Horngren
Publisher: PEARSON C
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Chapter 25, Problem 25.1EI
To determine

Differential analysis:

Differential analysis is concerned with determining increase or decrease in the operating income due to change in cost of the company. The decision under differential analysis is made depending on the favorable effect on the cost and profit.

To determine:

1. Whether the outsourcing the payroll function will increase or decrease the Duck Associate’s operating income.

2. Any other factors that might support keeping Stock, rather than outsourcing payroll processing. How should each of the factors affect Tan’s decision if she wants to do what is best for Duck Associates and act ethically?

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ACCOUNTING PRINCIPLES 122 5/16 >C<

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