Globus Autos Sells a Single Product

question 190

Multiple Choice

Globus Autos sells a single product.8,000 units were sold resulting in $80,000 of sales revenue,$20,000 of variable costs,and $10,000 of fixed costs.If a change is made in one parameter of CVP analysis,it is an example of ________.

• A) sensitivity analysis
• B) incremental budgeting
• C) variance analysis
• D) multiple cost drivers

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Definitions:

Invisible Hand

A term coined by Adam Smith to describe the unintended social benefits resulting from individual actions.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the point where the supply and demand curves intersect, representing market balance.

Equilibrium Quantity

The amount of products or services available that meets the demand at the price where market equilibrium is achieved.