module 16

Question 1

cost volume profit analysis

Answer 1

A technique to examine the relationships
among total volume of an independent variable,
total costs, total revenues, and profits
for a time period.

Question 2

sensitivity analysis

Answer 2

• How a model responds to changes in one or more
  independent variables

Question 3

unit contribution margin

Answer 3

Indicates how sensitive an income model is to a change
in unit sales
* The unit contribution margin is the difference between
the unit selling price and the unit variable costs

Question 4

contribution margin

Answer 4

The portion of every sales dollar contributed toward
covering fixed costs and earning a profit

Question 5

opporating leverage

Answer 5

▪ A measure of the extent that an organization’s
costs are fixed