Which of the Following Is Not an Assumption of Conventional

question 12

Multiple Choice

Which of the following is not an assumption of conventional cost/volume/profit (CVP) analysis?

• A) The variable cost per unit varies over the relevant range of activity.
• B) The sales mix is unchanged over the relevant range of activity.
• C) Total fixed cost is constant over the relevant range of activity.
• D) Total variable cost changes in direct proportion to changes in the level of activity over the relevant range.
• E) The total revenue function is linear within the relevant range.

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Definitions:

Gap-Filling Presumptions

Legal principles or standards applied in contract law to address situations where the parties' agreement does not specify certain terms or conditions.

Mirror Image Rule

A principle in contract law stating that an offer must be accepted exactly without modifications for a valid contract to be formed.

Material Changes

Significant alterations or modifications that could affect a company’s financial condition or the value of its shares, requiring disclosure to shareholders and regulatory bodies.

Arbitration Provision

A clause in a contract that requires the parties to resolve disputes through arbitration rather than litigation.