Sensitivity analysis is more likely to be used for sales forecasts than for fixed overhead costs.

Name: Sensitivity analysis is more likely to be used for sales forecasts than for fixed overhead costs.
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Question

Quizplus · Accepted Answer

Sensitivity analysis is used to understand how changes in variables (such as sales volume) affect outcomes (such as revenue or profit). Sales forecasts are a key variable in budgeting and are subject to more uncertainty than fixed overhead costs, making them more likely to undergo sensitivity analysis.

Sensitivity Analysis Is More Likely to Be Used for Sales