Cost-volume-profit analysis is frequently based on the assumption that the production level is the same as the sales level.

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Cost-volume-profit analysis assumes that the production level is the same as the sales level, which means that all units produced are sold. This enables the calculation of certain key metrics, such as the contribution margin and the break-even point, which are useful for making decisions about pricing, production levels, and sales strategies. However, in reality, it is not always the case that all units produced are sold, and variations in inventory levels, production scheduling, and customer demand can affect the actual level of sales.

Cost-Volume-Profit Analysis Is Frequently Based on the Assumption That the Production