Which of the Following Statements Regarding Cost-Volume-Profit Analysis Is Incorrect

question 6

Multiple Choice

Which of the following statements regarding cost-volume-profit analysis is incorrect?

• A) Cost-volume-profit analysis assumes that fixed cost per unit is constant.
• B) Cost-volume-profit analysis assumes that the selling price cost per unit is constant.
• C) An increase in inventory during a period will affect cost-volume-profit relationships.
• D) Although cost-volume-profit analysis is based on assumptions that seldom will be perfectly achieved, the technique is still useful to managers.

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