Which of the Following Are Necessary Assumptions When Using the Contribution

question 119

Multiple Choice

Which of the following are necessary assumptions when using the contribution margin method of determining the break-even point?

• A)Average unit costs must be known.
• B)There must be an input-related cost driver.
• C)Fixed costs are irrelevant.
• D)Total variable cost must be known.
• E)Unit selling price and unit variable cost must be known.

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Definitions:

Criterion Variable

The dependent variable in a study or analysis that the independent variables aim to predict.

Aptitude Test

A standardized test designed to measure an individual's potential to acquire certain skills or knowledge.

Expected Performance

Anticipated or forecasted level of achievement or output based on certain criteria or conditions.

Predictor Variable

A variable that is used to make a prediction of an individual’s score on another variable (the criterion variable). Conceptually similar to an independent variable.