Asked by Reshelle Ytuarte on Jun 20, 2024
Verified
When management runs several CVP analyses with different combinations of estimates this is known as
A) variation analysis.
B) sensitivity analysis.
C) advanced CVP analysis.
D) goal-seek analysis.
Sensitivity Analysis
A technique used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.
CVP Analyses
Cost-Volume-Profit Analyses, a financial modelling technique that analyzes how changes in costs and volume affect a company's profits.
Estimates
Approximations or educated guesses used in planning and decision-making, especially in budgeting and forecasting.
- Apply sensitivity analysis in CVP to assess changes in assumptions.
Verified Answer
Learning Objectives
- Apply sensitivity analysis in CVP to assess changes in assumptions.
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