Problem:
Using the following information, perform a sensitivity analysis and indicate to which variable would have the greatest effect on operating income. Present the complete table.
Base High Low
Quantity Produced 6,000 7,000 5,000
Price $120.00 $130.00 $80.00
Direct Material $18.00 $25.00 $12.00
Direct Labor $12.00 $30.00 $7.25
Fixed Cost $20,000.00 $23,000.00 $15,000.00
Summary
The question is about sensitivity analysis for above data. The computations have been done for changes in quantity produced, changes in prices of the product, changes in direct material, changes in direct labor and changes in fixed cost.