Cost-volume-profit analysis is based on necessary assumptions.Which of the following is not one of these assumptions?
A)Costs can be classified as variable or fixed.
B)Relevant range includes all possible levels of activity that a company might experience.
C)Sales price and variable costs per unit of output remain constant as volume changes.
D)A constant sales mix in a multiproduct company.
E)Total fixed costs are held constant.

Question

Quizplus · Accepted Answer

The relevant range does not include all possible levels of activity; it only includes the range of activity over which the assumptions about fixed and variable costs are valid.

Cost-Volume-Profit Analysis Is Based on Necessary Assumptions