When Management Runs Several CVP Analyses with Different Combinations of Estimates

question 18

Multiple Choice

When management runs several CVP analyses with different combinations of estimates this is known as

• A) variation analysis.
• B) sensitivity analysis.
• C) advanced CVP analysis.
• D) goal-seek analysis.

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Definitions:

Operating Expenses

Expenses incurred through normal business operations, such as salaries, rent, and utilities, excluding cost of goods sold.

Primary Operations

The main activities a company engages in that directly relate to its core business or purpose.

Gains on Sales of Investments

The profit realized from the sale of investments such as stocks, bonds, or real estate.

Income Statement

A financial statement that shows a company's revenues and expenses over a period of time, reflecting the company's financial performance.