With Regard to the CVP Graph, Which of the Following

question 71

Multiple Choice

With regard to the CVP graph, which of the following statements is not correct?

• A) The CVP graph assumes that volume is the only factor affecting total cost.
• B) The CVP graph assumes that selling prices do not change.
• C) The CVP graph assumes that variable costs go down as volume goes up.
• D) The CVP graph assumes that fixed costs are constant in total within the relevant range.

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Definitions:

Set Point

A theory suggesting that the body maintains its weight and energy balance through internal regulatory mechanisms.

Genetically Influenced

Traits or characteristics that are affected by genes inherited from one's parents, including physical attributes and susceptibility to certain diseases.

Motivation

An inferred process within a person or animal that causes movement either toward a goal or away from an unpleasant situation.

Unpleasant Situation

A scenario or event that is disagreeable, uncomfortable, or causes distress to an individual.