Which of the Following Is Not an Assumption of CVP

question 99

Multiple Choice

Which of the following is not an assumption of CVP analysis?

• A)Costs can be accurately separated into fixed and variable components.
• B)Fixed costs per unit remain constant within the relevant range.
• C)Total variable costs are proportional to the level of activity.
• D)Selling price per unit remains the same at all activity levels.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenues.

Beginning Total Assets

The total value of all assets owned by a company at the start of a financial period.

Ending Total Assets

Ending Total Assets refer to the total value of all assets owned by a company at the end of a financial reporting period.

Return on Total Assets

Return on total assets (ROTA) is a financial metric that measures a company's profitability in relation to its total assets, indicating how efficiently a company uses its assets to generate profit.