Sensitivity analysis uses contribution and break-even analysis to determine the profit or loss at any given level of sales. Which one of the following is the calculation used in sensitivity analysis?
A) Fixed costs divided by contribution per unit of sales.
B) Contribution per unit of sales x (unit sales - break-even point in sales units) .
C) Contribution per unit of sales x (unit sales + break-even point in sales units) .
D) Total sales in units - the break-even point in sales units.
Correct Answer:
Verified
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