_____ is not an underlying assumption of the cost?volume-profit graph.
A)Expenses are categorized into variable and fixed costs
B)Sales mix will be constant
C)Revenues and expenses are nonlinear over the relevant range
D)Efficiency and productivity will be unchanged

Question

Quizplus · Accepted Answer

The cost-volume-profit (CVP) analysis assumes that revenues and expenses are linear over the relevant range, meaning they change at a constant rate with changes in volume. Option C, which states that revenues and expenses are nonlinear, contradicts this fundamental assumption.

_____ Is Not an Underlying Assumption of the Cost?volume-Profit Graph