In CVP Analysis, Managers Usually Assume That the Cost Function

question 11

Multiple Choice

In CVP analysis, managers usually assume that the cost function is linear. Which of the following equations best represents a linear function for total cost if the cost is a mixed cost?

• A) y = $200 + $60x
• B) y = $60x2
• C) y = $60x
• D) y = $200

---

Definitions:

Purchase Cycle

The sequence of stages that customers go through from recognizing a need, considering a purchase, making the purchase, and post-purchase behavior.

Value Added

The enhancement a company gives its product or service before offering the product to customers, increasing its value.

Expectancy Disconfirmation Model

A consumer satisfaction framework that compares actual product or service performance against pre-consumption expectations.

Expectancy Confirmation Model

A psychological theory suggesting that people tend to seek, interpret, favor, and recall information that confirms their pre-existing beliefs and expectations.