Cost Volume Profit (CVP) Analysis Is Based on a Number

question 111

Multiple Choice

Cost volume profit (CVP) analysis is based on a number of limiting assumptions. Which of the following is not one of the assumptions of the CVP model?

• A) Production units equal sales units over the period.
• B) If the firm has a product mix, the mix remains constant.
• C) Cost behaviour is linear over the relevant range.
• D) CVP analysis only applies to a single-product firm.

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