Assume That Only the Specified Parameters (That Is, Variables) Change

question 69

Multiple Choice

Assume that only the specified parameters (that is, variables) change in a sensitivity analysis. The contribution margin ratio increases when:

• A) Total short-term fixed costs increase.
• B) Total short-term fixed costs decrease.
• C) The variable cost per unit increases.
• D) The variable cost per unit decreases.
• E) Sales volume increases.

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Definitions:

Resources

Assets, materials, or substances that are available and valuable in producing goods or providing services.

Externalities

Costs or benefits that affect a party who did not choose to incur that cost or benefit, caused by an economic transaction.

Health Insurance

A form of insurance that covers medical expenses that arise due to illness or injury, typically providing coverage for a variety of healthcare services.

Quantity

The amount or number of a material or immaterial good considered as a unit or an aggregate.