Which of the following is not an assumption underlying cost-volume-profit analysis?
A) The break-even point will be passed during the period.
B) Total sales and total costs can be represented by straight lines.
C) Costs can be accurately divided into fixed and variable components.
D) The sales mix is constant.

Question

Quizplus · Accepted Answer

The assumption that the break-even point will be passed during the period is not an underlying assumption of cost-volume-profit (CVP) analysis. CVP analysis focuses on how profits are affected by various factors without assuming that the break-even point will necessarily be passed.

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