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:

Products

Items or services that are created through a process and are offered for sale or use.

Outsourcing

The practice of hiring third parties to perform services or create goods that traditionally were performed in-house by the company's own employees and staff.