When the Assumption of Linearity Is Applied to Revenue in CVP

question 72

Multiple Choice

When the assumption of linearity is applied to revenue in CVP analyses:

• A) fixed cost per unit increases as revenue decreases.
• B) variable cost per unit is linear with respect to total revenue.
• C) the sales mix remains constant, but prices decrease as volumes increase.
• D) the sales mix and all of the prices remain constant.

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Definitions:

Responding

The act of offering a response or reaction to a given stimulus or situation.

Electric Shock

The physical reaction or injury caused by electric current passing through the body.

Responding

The act of reacting to stimuli or situations in the environment.

Electric Shock

A sudden discharge of electricity through a part of the body, often used as an aversive stimulus in conditioning studies.