Use the Information Below to Answer the Following Questions

question 12

Multiple Choice

Use the information below to answer the following questions.
Saddle Company, a leather manufacturer, has a sales budget of $500,000 for February. The cost of sales is estimated to be 35% of sales. All materials purchased by Saddle Company are paid for in the month following the purchase. The beginning inventory for February is $10,000, and an ending inventory of $11,000 is desired. The trade payables balance at the beginning of February is $88,000.
-If a business wishes to test the effect of a 10% increase in selling price on its budget forecasts, it should use which form of analysis?

• A) sensitivity analysis
• B) ratio analysis
• C) statement analysis
• D) vertical analysis

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Definitions:

Variable-Ratio

A reinforcement schedule where rewards are given after a random number of responses, encouraging high and steady response rates.

Behavior Modification

Using conditioning to improve behavior.

Operant Conditioning

A method of learning wherein the intensity of an action is altered by either rewards or penalties.

Autistic Children

Children diagnosed with Autism Spectrum Disorder, characterized by challenges with social skills, repetitive behaviors, and speech and nonverbal communication.