A major assumption of break-even analysis and one which causes severe limitations in its use is that
A) revenues and operating costs are linear.
B) all costs are really semi-variable.
C) fixed costs really are fixed.
D) total revenue is nonlinear.

Question

Quizplus · Accepted Answer

Revenues and operating costs are assumed to be linear in break-even analysis, which is a major assumption that limits its usefulness.

A Major Assumption of Break-Even Analysis and One Which Causes