Which of the following is an assumption underlying standard CVP analysis?
A) In multiproduct companies, the sales mix is constant.
B) In manufacturing companies, inventories always change.
C) The price of a product or service is expected to change as volume changes.
D) Fixed expenses will change as volume increases.

Question

Quizplus · Accepted Answer

Standard CVP analysis assumes that the sales mix (proportion of different products sold) will remain constant, as it simplifies the analysis. However, in reality, sales mix may change depending on factors such as customer preferences, competition, and marketing efforts.

Which of the Following Is an Assumption Underlying Standard CVP