Asked by Giavanna Battaglia on Jul 19, 2024
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Cost-volume-profit analysis is based on necessary assumptions.Which of the following is not one of these assumptions?
A) Costs can be classified as variable or fixed.
B) Relevant range includes all possible levels of activity that a company might experience.
C) Sales price and variable costs per unit of output remain constant as volume changes.
D) A constant sales mix in a multiproduct company.
E) Total fixed costs are held constant.
Cost-volume-profit Analysis
An analytical tool used to determine how changes in cost, volume, and profit affect a company's profit.
Sales Mix
The proportion of different products or services that a company sells, intended to maximize profitability.
Relevant Range
The relevant range refers to the range of activity or volume over which the assumptions about variable and fixed cost behaviors hold true for management decision-making purposes.
- Apply cost-volume-profit (CVP) analysis to predict how changes in costs, sales volume, and price affect a company's profit.
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Learning Objectives
- Apply cost-volume-profit (CVP) analysis to predict how changes in costs, sales volume, and price affect a company's profit.
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