When Performing a Sensitivity Analysis, If the Selling Price Per

question 90

Multiple Choice

When performing a sensitivity analysis, if the selling price per unit is increased, then the ________.

• A) per unit fixed administrative costs will increase
• B) per unit direct materials purchase price will increase
• C) total volume of sales will increase
• D) total costs for sales commissions and other nonmanufacturing variable costs will increase

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Definitions:

Classical Range

In economics, refers to the level of output where all resources are fully employed, and prices are flexible, historically associated with the Classical theory of economics.

Savings

Money that is set aside from disposable income or after personal expenses have been covered, often put into a deposit or an investment for future use.

Wealth Effect

The change in spending and consumption patterns caused by changes in perceived wealth.

Recessions

are described as periods of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in successive quarters.