Which of the following is not an assumption of cost-volume-profit (CVP) analysis? A. The only factor that affects total costs is a change in volume. Which increase or deceases variable and mixed costs. B. Fixed costs is do not change. C. The price per unit does not change as volume changes D. The price per unit changes as volume changes.

Question

Business

Demetrius

21 July, 03:07

Which of the following is not an assumption of cost-volume-profit (CVP) analysis? A. The only factor that affects total costs is a change in volume. Which increase or deceases variable and mixed costs. B. Fixed costs is do not change. C. The price per unit does not change as volume changes D. The price per unit changes as volume changes.

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Answers (1)

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Keegan Hurst · Answer 1

D. The price per unit changes as volume changes.

Explanation:

According to the assumption of cost-volume-profit (CVP) analysis, the fixed cost will remain constant. It will never be changed. Because of the change in volume, the total cost would get affected that means the total cost amount is changed as compare before. As the volume changes, the price per unit is also the same.

So, the appropriate option is d. As the sales volume changes with the change in volume and the same are applied for variable cost.