Asked by Jimmy Batista on May 14, 2024
Verified
Which of the following is not an assumption underlying cost-volume-profit analysis?
A) The break-even point will be passed during the period.
B) Total sales and total costs can be represented by straight lines.
C) Costs can be accurately divided into fixed and variable components.
D) The sales mix is constant.
Cost-volume-profit Analysis
An accounting technique used to determine how changes in costs and volume affect a company's operating income and net income.
Sales Mix
The relative distribution of sales among the various products available for sale.
- Realize the applications and limitations of cost-volume-profit (CVP) analysis.
Verified Answer
AK
Aliza KombarbayevaMay 16, 2024
Final Answer :
A
Explanation :
The assumption that the break-even point will be passed during the period is not an underlying assumption of cost-volume-profit (CVP) analysis. CVP analysis focuses on how profits are affected by various factors without assuming that the break-even point will necessarily be passed.
Learning Objectives
- Realize the applications and limitations of cost-volume-profit (CVP) analysis.
Related questions
Which of the Following Statements About the Cost-Volume-Profit Graph Is ...
Cost-Volume-Profit Analysis Can Be Presented in Both Equation Form and ...
An Assumption of CVP Analysis Is That All Costs Can ...
In CVP Analysis the Term Cost Includes Manufacturing Costs and ...
Taveras Industries Developed the Following Information for the Product It ...