Cost/volume/profit (CVP) analysis is a technique available to management to unde

Question

Cost/volume/profit (CVP) analysis is a technique available to management to understand better the interrelationships of several factors that combine to determine a firm's operating profit, TTB. As with many such techniques, the accountant oversimplifies the real world by making assumptions. Which of the following is not a major assumption underlyinga conventional CVP analysis? O All costs incurred by a firm can be separated into their fixed and variable components O The product selling price per unit is affected by changes in volume levels. Operating efficiency and employee productivity are constant at all volume levels. Oin multi-product situations, the sales mix changes as volume changes. Total costs vary only with changes in sales volume. 3/ hm accounting tnx?todo=printview

Explanation / Answer

The correct answer is [d] = In multi product situations, the sales mix changes as volume changes.

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