Les is concerned that his variable cost per unit projection for a project may not be reliable.Which type of analysis will help him determine the effect that an incorrect variable cost estimate will have on the final outcome of the project?

Question

Quizplus · Accepted Answer

Sensitivity analysis will help Les determine what effect an incorrect variable cost estimate will have on the final outcome of the project by analyzing the impact of changes in input variables on the project's output. By analyzing potential changes in variable cost estimates, Les can determine the level of impact on the project's overall profitability and make adjustments as necessary. The other options may also be useful in analyzing project outcomes but are not as specifically tailored to assessing the impact of variable cost estimates.

Les Is Concerned That His Variable Cost Per Unit Projection