Which of the following is not a major assumption underlying CVP analysis?
A)All costs incurred by a firm can be separated into their fixed and variable components.
B)The product selling price per unit is constant at all volume levels.
C)Operating efficiency and employees productivity are constant at all volume levels.
D)For multiproduct situations,the sales mix can vary at all volume levels.

Question

Quizplus · Accepted Answer

CVP (Cost-Volume-Profit) analysis assumes that the sales mix remains constant as production and sales volumes change. This is crucial for accurately predicting how changes in volume affect costs and profits. Option D, which suggests that the sales mix can vary at all volume levels, contradicts this assumption, making it the incorrect choice.

Which of the Following Is Not a Major Assumption Underlying