Which of the following is not an assumption underlying cost-volume-profit analysis?
A)Product sales mix will not change during the period.
B)The breakeven point will be reached and surpassed during the period.
C)Cost behavior can be determined accurately.
D)Productivity is constant within the relevant range.

Question

Quizplus · Accepted Answer

The assumption that the breakeven point will be reached and surpassed during the period is not necessary for cost-volume-profit analysis to be applied. In some cases, a company may not reach its breakeven point, but cost-volume-profit analysis can still provide useful information. The other assumptions listed (product sales mix will not change, cost behavior can be determined accurately, and productivity is constant within the relevant range) are necessary for cost-volume-profit analysis to be applicable.

Which of the Following Is Not an Assumption Underlying Cost-Volume-Profit