When the Assumption of Linearity Is Applied to Revenue in CVP

question 103

Multiple Choice

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

• 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 and all of the prices remain constant
• D) The sales mix remains constant, but prices decrease as volumes increase

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Definitions:

SCID-X1

A severe immune system disorder known as X-linked severe combined immunodeficiency, primarily affecting males, where the body is unable to defend itself against bacteria, viruses, and fungi.

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A laboratory method used to separate mixtures of DNA, RNA, or proteins according to molecular size.