Cost-Volume-Profit Analysis Is Based on Necessary Assumptions

question 67

Multiple Choice

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

• A) Total fixed costs are held constant.
• B) Costs can be classified as variable or fixed.
• C) Relevant range includes all possible levels of activity that a company might experience.
• D) A constant sales mix in a multiproduct company.
• E) Sales price and variable costs per unit of output remain constant as volume changes.

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Definitions:

Preconventional Morality

The first level of Kohlberg's stages of moral development, where moral reasoning is based primarily on consequences and individual interests.

Social Duty

An obligation or responsibility towards society that an individual is expected to fulfill, often for the greater good.

Concrete Rewards

Tangible incentives or prizes given in recognition of achievements or desired behaviors.

Avoid Punishment

A behavior modification strategy where actions are taken to escape or evade from adverse stimuli.