The what-if technique, which examines changes in results, if original prediction would not be achieved is called _____________?
Correct answer: C. sensitivity analysis
- A. change analysis
- B. original analysis
- C. sensitivity analysis
- D. predicted analysis
Explanation
Sensitivity analysis uses a what-if approach to measure how changes in assumptions, such as sales volume or costs, affect the projected results. The other choices are not standard budgeting terms for this technique.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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