Which of the following is not an underlying assumption of cost-volume-profit analysis?
A)Variable costs are strictly variable.
B)All costs can be classified either as a fixed or variable cost and behave linearly.
C)Sales prices do not change in the relevant range.
D)Sales mix changes within the relevant range of production.

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis assumes that the sales mix remains constant within the relevant range of production. Therefore, choice D, which states that the sales mix changes within the relevant range, is not an underlying assumption of cost-volume-profit analysis.

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