Basic Break-Even Analysis Typically Assumes That

question 17

Multiple Choice

Basic break-even analysis typically assumes that:

• A)revenues increase in direct proportion to the volume of production,while costs increase at a decreasing rate as production volume increases.
• B)variable costs and revenues increase in direct proportion to the volume of production.
• C)both costs and revenues are made up of fixed and variable portions.
• D)costs increase in direct proportion to the volume of production,while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts.
• E)All of the above are assumptions in the basic break-even model.

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Definitions:

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