One of the assumptions of cost-volume-profit (CVP)analysis is that there are no changes in the ________.
A) accounts payable
B) cash balance
C) inventory levels
D) accounts receivables

Question

Quizplus · Accepted Answer

CVP analysis assumes that inventory levels remain constant. This means that the cost of goods sold and the variable cost per unit also remain constant. Any changes in inventory levels could affect the cost of goods sold, which would in turn affect the breakeven point and the profit or loss of the company. Therefore, it is important to keep inventory levels in mind when conducting CVP analysis.

One of the Assumptions of Cost-Volume-Profit (CVP)analysis Is That There