When the assumption of linearity is applied to revenue in CVP analyses
A) Fixed cost per unit increases as revenue decreases
B) Variable cost per unit is linear with respect to total revenue
C) The sales mix and all of the prices remain constant
D) The sales mix remains constant, but prices decrease as volumes increase

Question

Quizplus · Accepted Answer

In CVP analysis, the assumption of linearity implies that the sales mix and prices remain constant, allowing for straightforward calculations of costs, volume, and profit relationships.

When the Assumption of Linearity Is Applied to Revenue in CVP