Which of the Following Situations Would Be Most Likely to Violate

question 32

Multiple Choice

Which of the following situations would be most likely to violate cost-volume-profit assumptions about fixed costs?

• A) When production volume increases beyond the capacity of the plant, a second shift will be added instead of building a new plant.
• B) As volume decreases, per-unit fixed manufacturing overhead remains constant.
• C) The company's raw material supplier typically allows volume discounts when larger amounts of the raw material are purchased.
• D) Fixed costs per unit decrease as volume increases.