operating income as changes occur in output level, selling price, variable costs per unit, and/or fixed costs. 50% surveyed companies use some form Underlying Assumptions Show Fragility of Model Volume of units produced and sold is the only driver affecting changes in revenue and costs Total costs can be divided into fixed and variable components. All costs and revenues are linear Unit SP, VC, and total fixed costs are known and constant Sales mix, if multi-product company, remains constant Inventories…
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