3. Why external users used the Absorption costing system for their decision-making? Analyze the reasons. [2]

4. The owner of the company is the Managing Director of that company who didnt take any salary from the business. The salary of that Managing director is which type of cost and why? Explain. [2]

5. Greater the amount margin of safety is better. Explain the statement with an example. { 2]

6. How Degree of operating leverage shows the sensitivity between sales and net operating income? Explain. [2]