Which One of the Following Is Not an Assumption of CVP

question 93

Multiple Choice

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

• A) All units produced are sold.
• B) All costs are variable costs.
• C) Sales mix remains constant.
• D) The behavior of costs and revenues are linear within the relevant range.

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Definitions:

Annual Revenues

The total amount of sales and other income generated by a business within a fiscal year.

Direct Material

Raw input directly utilized in the creation of a product, essential for the product’s production process.

Direct Labor

The wages and other compensation paid to employees directly involved in producing goods or providing services.

Overhead

General business expenses not directly attributed to creating a product or service.