1- Sensitivity analysis: A. is a quantitative method of evaluating a decision-ma
ID: 2576545 • Letter: 1
Question
1- Sensitivity analysis:
A. is a quantitative method of evaluating a decision-maker's sensitivity to ethical situations.
B is the process of changing the value of key variables in decision-making to determine how sensitive decisions are to those changes.
C is the decision-making process of adjusting the discount rate used in time value of money calculations.
D does not take risk into account
2- Ideally segregation of duties requires which duties to be segregated'
A Managerial and financial accounting duties
B Manufacturing and selling and administrative duties
C Computerized recordkeeping and manual recordkeeping duties
D Record keeping, custody. and authorization duties
3- Hogan Inc plans to double its rental space next year which will increase its fixed costs by 40% while variable costs remain the same. Current year costs are as follows
Variable costs $10 per unit
Fixed costs $30,000
It next year production is expected to be 20.000 units, estimated total costs will be -
A. 5242,000
B. $230,000
C. $322,000
D $212,000
Explanation / Answer
ans) 1.(B) is the process of changing the value of key variables in decision-making to determine how sensitive decisions are to those changes.
2. (D) Record keeping, custody. and authorization duties
3. (A) $242,000
Total costs:
Variable cost = 20,000 X 10 = 200,000
Fixed cost = 30,000
Add: additional fixed cost = 12,000 42,000
(30,000 X 40%)
Total cost 242,000
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