The following assumptions are made in case of break even analysis, except
A)All fixed costs are fixed
B)All variable costs are fixed
C)The prices of input factors are constant
D)Volume of production and volumes of sales are equal

Question

Quizplus · Accepted Answer

Break-even analysis assumes that all costs can be classified into fixed and variable costs, with variable costs changing with the level of output. The statement that "All variable costs are fixed" contradicts this fundamental assumption, making it the incorrect choice.

The Following Assumptions Are Made in Case of Break Even