Cost-Volume-Profit Analysis Is Based on Three Basic Assumptions

question 10

Multiple Choice

Cost-volume-profit analysis is based on three basic assumptions. Which of the following is not one of these assumptions?

• A) Total fixed costs remain constant over changes in volume.
• B) Curvilinear costs change proportionately with changes in volume throughout the relevant range.
• C) Variable costs per unit of output remain constant as volume changes.
• D) Sales price per unit remains constant as volume changes.
• E) All of these are basic assumptions.

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Definitions:

Nail Root

The part of a fingernail or toenail that is embedded in the skin and gives rise to the visible nail.

Arrector Pili

Small muscles attached to hair follicles that, when contracted, cause the hair to stand upright (goosebumps).

Skeletal Muscle

A type of muscle that is attached to bones and is responsible for voluntary movements of the body.

Stratum Lucidum

A thin, clear layer of dead skin cells found in the epidermis, specifically in regions of thick skin like the palms and soles.