Which of the following statements applies to cost volume profit and sensitivity analysis?
i.Only one variable is changed
ii.All variables are changed.
iii.One or more variables are changed.iv.Only one set of variables need be assessed.

Question

Quizplus · Accepted Answer

Cost volume profit and sensitivity analysis involve changing one or more variables to analyze the impact on profit or other financial measures. Therefore, statement iii applies as one or more variables are changed. Statements i and iv are incorrect as more than one variable may be changed and multiple sets of variables may need to be assessed. Statement ii is incorrect as not all variables need to be changed for these types of analyses.

Which of the Following Statements Applies to Cost Volume Profit