With the Aid of Computer Software, Managers Can Vary Assumptions

question 9

Multiple Choice

With the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume and can immediately see the effects of each change on the break-even point and profit.Such an analysis is called:

• A) "what if" or sensitivity analysis.
• B) vary the data analysis.
• C) computer-aided analysis.
• D) data gathering.

---

Definitions:

Cost Index

An index that measures the change in the cost of a basket of goods or services over time, often used in business and economics to track inflation or deflation.

Inventory-Pool Method

A technique in accounting used to group similar inventories together to simplify valuation and cost calculations.

Dollar-Value LIFO

A variation of the last in, first out (LIFO) method that measures and adjusts inventory layers in terms of dollar value rather than physical count.