Which of the Following Questions Cannot Be Answered by Cost-Volume-Profit

question 38

Multiple Choice

Which of the following questions cannot be answered by cost-volume-profit analysis?

• A) What is the most profitable sales mix?
• B) Will the firm have sufficient funds to meet its commitments to creditors?
• C) What additional sales volume is required to offset an increase in purchase costs?
• D) If variable costs, such as labour, are replaced with fixed costs, such as machinery, what will be the impact on profits?

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Definitions:

Mortality Rate

A measure of the number of deaths in a particular population, scaled to the size of that population, per unit of time.

Total Death Rate

The number of deaths per year per 1,000 people in a population, which is a basic demographic indicator of the level of mortality in a community or society.

Sex Ratio

The demographic concept expressing the number of males per hundred females in a given population.

Life Expectancy

The average period that an individual is expected to live, based on statistical measures of mortality patterns.