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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