Which statement is NOT an assumption used to prepare a cost-volume-profit graph?
A) The sales mix is constant.
B) The constant cost fluctuates.
C) Units produced equals units sold.
D) Linear costs are within the relevant range.

Question

Quizplus · Accepted Answer

The assumption that constant costs fluctuate is illogical and contradictory. A constant cost by definition does not fluctuate. Therefore, it is not a valid assumption used to prepare a cost-volume-profit graph. The other assumptions listed (constant sales mix, equal units produced and sold, and linear costs within the relevant range) are all commonly used assumptions in preparing a cost-volume-profit graph.

Which Statement Is NOT an Assumption Used to Prepare a Cost-Volume-Profit