One assumption of CVP (cost-volume-profit) analysis is that changes in activity are not the only factors...
One assumption of CVP (cost-volume-profit) analysis is that changes in activity are not the only factors that affect costs.
Select one:
True
False
Homework Answers
Some of the assumptions of CVP (cost-volume-profit) analysis
which are also related to the break even analysis as well are as
below:
a) There is a liner relationship between the cost and the revenues
given the range of activity
b) Cost includes Variable and Fixed cost and can be measured.
c) Changes in activity can only affect the cost and no other factors can impact the cost
d) All that is produced is sold.
Hence, as seen above, the statement that "Changes in activity are not the only factors that affect cost" is false as it contradicts point C mentioned above.
Answer is FALSE
Add Answer to:
One assumption of CVP (cost-volume-profit) analysis is that
changes in activity are not the only factors...
Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs...
Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs is linear throughout the relevant range. All costs can be classified as either variable or fixed. Changes in activity and sales mix are the only factors that affect costs. O All units produced are sold.
which of the following is not an assumption of cost-volume-profit (CVP) analysis? a) The number of...
which of the following is not an assumption of cost-volume-profit (CVP) analysis? a) The number of units sold is the only revenue driver and the only cost driver. b) Total costs can be separated into two components. c) When represented graphically, the behaviors of total revenues and total cost are linear. d) Selling price, variable cost per unit, and total fixed costs are known and constant. e) The total costs are never separate into components in this analysis.
________ is an underlying assumption of cost-volume-profit analysis. A : All costs can be classified as...
________ is an underlying assumption of cost-volume-profit analysis. A : All costs can be classified as either variable or fixed with reasonable accuracy B : Changes in activity and other factors affect costs C : The behavior of both costs and revenues is curvilinear throughout the entire range of the activity index D : All units produced are either sold or in ending inventory
Which one of the following is not an assumption of CVP analysis?
Which one of the following is not an assumption of CVP analysis? Profit for the period is constant. The sales mix is constant. Costs can be classified as variable or fixed. Volume or level of activity affects costs.
The cost volume profit analysis, commonly referred to as CVP, is a planning process that management...
The cost volume profit analysis, commonly referred to as CVP, is a planning process that management uses to predict the future volume of activity, costs incurred, sales made, and profits received. In other words, it’s a mathematical equation that computes how changes in costs and sales will affect income in future periods (Peavler, 2019). CVP analysis provides managers with the advantage of being able to answer specific questions needed in business analysis. Such as, what is the company's breakeven point?...
Cost-volume-profit (CVP) analysis is a powerful tool for planning and decision making. Thus, CVP analysis emphasized...
Cost-volume-profit (CVP) analysis is a powerful tool for planning and decision making. Thus, CVP analysis emphasized the interrelationships of costs, quantity sold, and price. This analysis is defined as assessment of total revenues, total costs and operating income in response to changes in the volume of sales, the selling price, variable cost or fixed costs of production. The CVP analysis can be a valuable tool in identifying the extent and magnitude of the economic trouble a company is facing and...
Cost-volume-profit analysis assumes fixed costs: Remains constant on a per unit basis as activity changes. Remains...
Cost-volume-profit analysis assumes fixed costs: Remains constant on a per unit basis as activity changes. Remains constant from one period to the next. Increases in total as activity increases. Remains constant as activity changes. None of these.
Cost Accounting = Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis...
Cost Accounting = Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis is used for decision making?
Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis is used for...
Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis is used for decision making?
Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis is used for...
Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis is used for decision making?
Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs is linear throughout the relevant range. All costs can be classified as either variable or fixed. Changes in activity and sales mix are the only factors that affect costs. O All units produced are sold.
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