Asked by Vaden Mangler on Jul 15, 2024
Verified
Which of the following is an assumption underlying standard CVP analysis?
A) In multiproduct companies, the sales mix is constant.
B) In manufacturing companies, inventories always change.
C) The price of a product or service is expected to change as volume changes.
D) Fixed expenses will change as volume increases.
CVP Analysis
Cost-Volume-Profit Analysis, a business management tool used to determine how changes in costs and volume affect a company's operating income and net income.
Sales Mix
refers to the composition of different products or services sold, impacting overall sales and profitability.
Fixed Expenses
These are expenses that remain constant regardless of the amount of goods produced or sold, including items like rent, wages, and insurance premiums.
- Identify and understand the assumptions underlying standard CVP analysis.
Verified Answer
Learning Objectives
- Identify and understand the assumptions underlying standard CVP analysis.
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