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

question 39

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) The relationship between volume, costs, and profits do not necessarily hold outside the relevant range.

Identify strategies to increase sensitivity and effectiveness in working with older adults.

Understand the purposes and costs associated with holding cash in a firm.

Recognize different methods of managing accounts receivable and their impacts on a firm’s finances.

Understand the concepts and types of demand for holding cash, including transactions, precautionary, and speculative demands.

---

Definitions:

Power-Assisted Steering Circuit

A hydraulic or electric system in vehicles that reduces the effort required by the driver to turn the steering wheel.

Non-Positive Displacement

A type of pump or motor wherein the fluid or gas flow rate does not have a direct correlation with the speed of the moving parts, allowing for variable output.

Engine Coolant Pump

A pump, also known as a water pump, that circulates coolant through an engine's cooling system to regulate its temperature and prevent overheating.

Plunger

A device that uses a movable rod to create suction or pressure, commonly used in pumps, valves, and hydraulic systems.