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

question 10

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) All of these are basic assumptions.

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Definitions:

Other-race Effect

The tendency to more easily recognize faces of the race that one is most familiar with, which is often one's own race.

Scapegoat Theory

The theory that prejudice offers an outlet for anger by providing someone to blame.

Just-world Phenomenon

The cognitive bias to believe that the world is fundamentally fair, leading individuals to rationalize unjust situations by blaming the victims.

Ingroup Bias

The tendency to favor members of one's own group over those in other groups.