Which of the following are assumptions of cost volume profit analysis?
i. Sales mix is constant.
ii. External factors do not change.
iii. Fixed costs change with sales volume.
iv. Variable costs are constant per unit of sales.

Question

Quizplus · Accepted Answer

Assumption i is that sales mix is constant, which means that the proportion of different products or services sold remains the same. Assumption ii is that external factors, such as competition or economic conditions, do not change. Assumption iv is that variable costs are constant per unit of sales, which means that the cost per unit remains the same regardless of the level of sales. However, assumption iii is incorrect as fixed costs do not change with sales volume. Therefore, the correct answer is C, which includes assumptions i, ii, and iv.

Which of the Following Are Assumptions of Cost Volume Profit