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Vickie Rippin DVM

Dec 08, 2024

All of the following are assumptions of cost-volume-profit analysis except

All of the following statements are assumptions of cost-volume-profit analysis, except for one. Which of the following is not an assumption?
a. The sales mix remains constant.
b. Costs can be categorized into fixed and variable components.
c. There is no change in inventory quantities during the period.
d. Within the relevant range of operating activity, the efficiency of operations can vary.

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3 Answers

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Anonymous

Feb 07, 2025

d. within the relevant range of operating activity, the efficiency of operations can change.Explanation:Cost-volume-profit analysis is also known as the break even analysis, it is an important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is. It is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.Generally, to use the cost-volume-profit analysis, financial experts usually make some assumptions and these are; 1. Sales price per unit product is kept constant. 2. Variable costs per unit product are kept constant and the total fixed costs of production are kept constant i.e costs can be divided into fixed and variable components.3. All the units produced are sold i.e there is no change in inventory quantities during the period. 5. The costs accrued are as a result of change in business activities.6. A company selling more than a product should simply sell in the same mix i.e the sales mix is constant. Hence, the aforementioned are assumptions of cost-volume-profit analysis except that, within the relevant range of operating activity, the efficiency of operations can change.
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A
Anonymous

Feb 17, 2025

there is no following so id just amuse false
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