Cost-volume-profit analysis assumes all of the following EXCEPT:
A)all costs are purely variable or fixed.
B)units manufactured equal units sold.
C)total variable costs remain the same over the relevant range.
D)total fixed costs remain the same over the relevant range.

Question

Quizplus · Accepted Answer

Cost-volume-profit (CVP) analysis assumes that total variable costs change in proportion to changes in volume, not that they remain the same. This means as production or sales volume increases, total variable costs increase proportionally, and vice versa.

Cost-Volume-Profit Analysis Assumes All of the Following EXCEPT