With regard to the CVP graph,which of the following statements is not correct?
A)The CVP graph assumes that volume is the only factor affecting total cost.
B)The CVP graph assumes that selling prices do not change.
C)The CVP graph assumes that variable costs go down as volume goes up.
D)The CVP graph assumes that fixed expenses are constant in total within the relevant range.

Question

Quizplus · Accepted Answer

The CVP graph assumes that variable costs per unit remain constant regardless of the volume of activity. It does not assume that variable costs go down as volume goes up.

With Regard to the CVP Graph,which of the Following Statements