Which of the Following Are Assumptions of Cost Volume Profit

question 81

Multiple Choice

Which of the following are assumptions of cost volume profit analysis?
i. Sales mix is constant.
ii. External factors do not change.
iii. Fixed costs change with sales volume.
iv. Variable costs are constant per unit of sales.

• A) i, ii and iii
• B) ii, iii and iv
• C) i, ii and iv
• D) All of the given answers

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Definitions:

Cash Discounts

Cash discounts are reductions in the price of goods or services offered to buyers as an incentive for early payment.

Contra-Revenue Account

An account that is deducted from gross revenue to determine net revenue, such as sales returns, allowances, and discounts.

Income Statement

A financial statement that shows a company's financial performance, including revenues, expenses, and profits over a specific period.

Current Liability

Obligations or debts that a company must pay within a year from the date of the balance sheet.