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:

SELL Sequence

A structured sales strategy emphasizing specific steps such as Show, Explain, Lead, and Lock to close a deal.

Salesperson

An individual who sells products or services to customers, often directly, in order to generate revenue for a business or company.

Benefits

Advantages or positive outcomes that result from the use of a product or service, often used as selling points in marketing.

Emotional Dissonance

A state of conflict between publicly displayed emotions and internal feelings, often experienced by employees in service roles.