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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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