Which of the following is not an assumption used to prepare a cost-volume-profit graph?
A) There are identifiable linear revenue and linear cost functions that remain constant over the relevant range.
B) Selling prices and costs are known with certainty.
C) The sales mix is known with certainty for multiple-product break-even settings.
D) Units produced always result in finished goods inventories.
E) None of these are assumptions is used in preparing cost-volume-profit graphs.

Question

Which of the following is not an assumption used to prepare a cost-volume-profit graph?
A) There are identifiable linear revenue and linear cost functions that remain constant over the relevant range.
B) Selling prices and costs are known with certainty.
C) The sales mix is known with certainty for multiple-product break-even settings.
D) Units produced always result in finished goods inventories.
E) ​None of these are assumptions is used in preparing cost-volume-profit graphs.

Quizplus · Accepted Answer

The assumption that units produced always result in finished goods inventories is not used to prepare a cost-volume-profit graph. The other assumptions listed are typically used in preparing this type of graph.

Which of the Following Is Not an Assumption Used to Prepare