Sensitivity analysis can be best used in

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Q1. Sensitivity analysis can be best used in the budgeting process to

a. Explore the uncertainty surrounding their estimates

b. Remove the subjective nature from the budgeting process

c. Answer the what if questions regarding key projections

d. Consider alternatives and options in the budgeting process

q2. Which of the following is true?

1. Divisional income statements do not include allocated common costs

2. The gross margin ratio is computed by dividing the operating income by sales

a. 1

b. 2

c. Both

d. Neither

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