Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 required: I) Managers may use Sensitivity analysis in their accounting system. ii) What is sensitivity analysis? ii) How is Sensitivity analysis useful to managers?
Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 required: I) Managers may use Sensitivity analysis in their accounting system. ii) What is sensitivity analysis? ii) How is Sensitivity analysis useful to managers?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 2CMA: The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the...
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Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average
revenue and cost of sales are as follows:
Selling price per unit $20.00
Variable costs per unit:
Direct materials $4.00
Direct manufacturing labor $1.60
Manufacturing
Selling costs $2.00
Annual fixed costs $96,000
required:
I) Managers may use Sensitivity analysis in their accounting system.
ii) What is sensitivity analysis?
ii) How is Sensitivity analysis useful to managers?
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