Question

Which of the following is a qualitative factor that could affect a decision involving incremental analysis?

A : The opportunity to use productive capacity in some other manner.
B : Lost morale among employees when a line of business is eliminated.
C : Increased direct labor costs.
D : Rent expense.

Answer 1

Answer: Option B

Explanation: In simple words, incremental analysis refers to the technique under which the organisations tries to compute the actual difference between various alternatives.

The opportunity cost, direct labor cost all are quantitative characters that influence the decision while lost morale is a qualitative characteristics.

Hence from the above we can conclude that the correct option is B.