Which of the following items is NOT an assumption of CVP analysis?
A)Total costs can be divided into a fixed component and a component that is variable with respect to the level of output.
B)When graphed, total costs curve upward.
C)The unit-selling price is known and constant.
D)All revenues and costs can be added and compared without taking into account the time value of money.

Question

Quizplus · Accepted Answer

In CVP analysis, it is assumed that total costs are linear, not curved, meaning they do not curve upward but rather increase at a constant rate with the level of output.

Which of the Following Items Is NOT an Assumption of CVP