Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 9

Why do management accountants use sensitivity analysis?

Step 1 of 2

Sensitivity analysis is the name for an assortment of ways that scrutinize how a quantity deviates if factors concerned in predicting that quantity deviates. For example, how the operating profit will change if the factor used to determine the profit like sales price per unit changes.