Which of the Following Is NOT an Assumption of Cost-Volume-Profit

question 60

Multiple Choice

Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis?

• A) The only factor that affects total costs is a change in volume, which increases or decreases total variable and mixed costs.
• B) The price per unit does not change as volume changes.
• C) Total fixed costs do not change.
• D) The price per unit changes as volume changes.

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Definitions:

Exponential Smoothing Model

A time series forecasting method that applies weighted averages of past observations, decreasing exponentially as the observations get older.

Mean Square Error

A statistical measure used to evaluate the accuracy of a model by calculating the average squared difference between the estimated values and the actual value.

Smoothing Constant

A Smoothing Constant is a parameter used in exponential smoothing models for forecasting, which controls the weight given to the most recent observation.

Regression Method

A statistical process for estimating the relationships among variables, often used to predict the value of a dependent variable based on one or more independent variables.