Cost-Volume-Profit Analysis Is a Technique Available to Management to Understand

question 103

Multiple Choice

Cost-volume-profit analysis is a technique available to management to understand better the interrelationships of several factors that affect a firm's profit.As with many such techniques,the accountant oversimplifies the real world by making assumptions.Which of the following is not a major assumption underlying CVP analysis?

• A)All costs incurred by a firm can be separated into their fixed and variable components.
• B)The product selling price per unit is constant at all volume levels.
• C)Operating efficiency and employee productivity are constant at all volume levels.
• D)For multi-product situations,the sales mix can vary at all volume levels.

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Definitions:

Collection tubes

Containers used for the collection and storage of samples such as blood, urine, or saliva, for laboratory analysis.

Glucose tolerance test

A medical test measuring the body's ability to metabolize glucose, used to diagnose diabetes.

High-carbohydrate diet

A diet that includes a higher proportion of carbohydrate sources relative to fats and proteins.

Initial blood

The first sample of blood taken for diagnostic or screening purposes, critical for establishing baseline values in medical assessments.