Which of These Is Not an Assumption of Cost-Volume-Profit Analysis

question 28

Multiple Choice

Which of these is not an assumption of cost-volume-profit analysis?

• A) The behaviour of income and expenses is regarded as linear over the relevant range.
• B) Costs can be classified into variable and fixed categories.
• C) The time value of money is incorporated into the analysis.
• D) The sales mix will remain constant.

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Definitions:

SSE

Sum of Squared Errors, a measure used in statistics to quantify the discrepancy between the data and an estimation model.

MSR

Mean Square Regression, indicating the average of squared differences between the observed and predicted values in regression analysis.

Observations

Data collected or measured during a study, experiment, or survey.

Coefficient Of Determination

A statistical measure that determines the proportion of variance in the dependent variable predictable from the independent variable(s).