In calculating the break-even point for a multi-product company, which of the following assumptions are commonly made?
1) Sales volume equals production volume
2) Variable expenses are constant per unit.
3) A given sales mix is maintained for all volume changes.

Question

Quizplus · Accepted Answer

In calculating the break-even point for a multi-product company, it is commonly assumed that sales volume equals production volume (to avoid accounting for changes in inventory), variable expenses remain constant per unit (to simplify the calculation of variable costs), and a given sales mix is maintained for all volume changes (to ensure the proportion of each product sold remains constant, simplifying the calculation).

In Calculating the Break-Even Point for a Multi-Product Company, Which