Which of the Following Is Not an Assumption of CVP

question 83

Multiple Choice

Which of the following is not an assumption of CVP analysis?

• A) The selling price per unit is constant.
• B) Total variable costs vary in proportion with changes in activity levels.
• C) The sales mix varies in proportion with changes in activity levels.
• D) Employee productivity is constant across all activity levels.

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Definitions:

Inventory

The raw materials, work-in-process products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Aggressive Revenue Recognition

A practice where a company prematurely or improperly records revenue to make its financial performance appear better.

Receivables Management

Practices and procedures used to manage amounts owed to a business by its customers, enhancing cash flow.

Note Disclosures

Additional information provided in financial reports that complements and clarifies the main financial statements, often detailing accounting policies and methodologies.