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The Assumptions Underlying Cost-Volume-Profit Analysis Seldom Are Entirely Valid

question 43

Essay

The assumptions underlying cost-volume-profit analysis seldom are entirely valid.How does that affect the usefulness of the technique?


Definitions:

Predicts Behavior

The ability of certain variables, traits, or conditions to indicate or determine future actions, reactions, or outcomes.

Objective Measures

Quantifiable methods of data collection used to gather unbiased, empirical evidence that is not influenced by personal feelings or opinions.

Personality Traits

Are enduring characteristics or qualities that describe consistent patterns in the way individuals think, feel, and behave.

Statistical Analysis

The process of collecting, exploring, and presenting large quantities of data to discover underlying patterns and trends.

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