Which of the Following Is an Assumption of CVP Analysis

question 116

Multiple Choice

Which of the following is an assumption of CVP analysis?

• A) Total costs can be divided into a fixed component and a component that is variable with respect to the level of output.
• B) When graphed, total costs curve upward.
• C) The unit-selling price is variable as it is subject to demand and supply.
• D) Total costs can be divided into inventoriable and period costs with respect to the level of output.

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Definitions:

Current Account Deficit

A situation where a country’s total imports of goods, services, and transfers are greater than its total exports, indicating it is spending more abroad than it is earning.

Dollar Value

The worth of a good or service expressed in terms of the amount of money that can be exchanged for it.

Dollar Appreciates

An increase in the value of the US dollar relative to other currencies in the global market.

Yen

The official currency of Japan, known for being one of the most traded currencies in the foreign exchange market.