Which of the Following Statements Is True Regarding Horizontal Analysis

question 32

Multiple Choice

Which of the following statements is true regarding horizontal analysis?

• A)Horizontal analysis can only be used with balance sheet accounts.
• B)Horizontal analysis can only be used with income statement accounts.
• C)Horizontal analysis can only be used with retained earnings accounts.
• D)Time series analysis is an advanced statistical technique for horizontal analysis.

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Definitions:

Output

The total amount of goods or services produced by a person, machine, or industry.

Total Fixed Cost

The sum of all expenses that remain constant regardless of the level of production or output in a business operation.

Average Fixed Cost

the total fixed costs divided by the number of units produced, illustrating how fixed costs dilute with increased production.

Average Variable Cost

The total variable costs of production divided by the number of units produced, representing the variable cost per unit.