One implication of cost-volume-profit analysis is that, when companies have significant fixed costs, total profits will always change proportionately with levels of output.

Question

Quizplus · Accepted Answer

While cost-volume-profit analysis does consider fixed costs and their impact on profits, it does not necessarily mean that total profits will always change proportionately with levels of output. Other factors such as changes in sales price and variable costs can also affect profits.

One Implication of Cost-Volume-Profit Analysis Is That, When Companies Have