Which of the following is NOT an underlying assumption of cost-volume-profit analysis?
A)We can classify expenses into fixed and variable categories.
B)Sales mix will be constant.
C)Revenues and expenses are linear over the relevant range.
D)There will be changes in efficiency or productivity.

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis assumes that there will be no changes in efficiency or productivity. This means that the level of production will remain consistent and there will be no improvements or declines in the rate at which products are produced. The other options (A, B, and C) are all underlying assumptions of cost-volume-profit analysis.

Which of the Following Is NOT an Underlying Assumption of Cost-Volume-Profit