Which of the Following Is Not an Assumption in CVP

question 136

Multiple Choice

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

• A) Actual costs will be exactly the amount that we predict in the analysis
• B) Operations are within the relevant range
• C) The revenue function is linear
• D) The cost function is linear

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Definitions:

Units

A measure of quantity, such as items, goods, or services, which can be counted or measured.

FIFO

First-In, First-Out (FIFO) is an inventory valuation method where goods first added to inventory are the first ones considered sold.

Ending Inventory

The financial value of products on hand for selling at the end of a fiscal period.

Units

basic quantities or measurements used as a standard to express values, amounts, or sizes.