The use of cost-volume-profit analysis to evaluate the impact of tactical changes is limited by the assumption that:
A) All costs are purely fixed or variable.
B) The company produces a single product.
C) Revenue and cost functions are linear.
D) Production volumes are confined to the relevant range.

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis assumes that all costs can be classified as either fixed or variable, which may not always be the case in real-world scenarios.

The Use of Cost-Volume-Profit Analysis to Evaluate the Impact of Tactical