CVP analysis makes all of the following assumptions except a change in volume is the only factor that affects costs. revenues are linear throughout the relevant range. the mix of products will not change. inventory levels will increase.

CVP analysis makes all of the following assumptions except a change in volume is the only factor that affects costs. revenues are linear throughout the relevant range. the mix of products will not change. inventory levels will increase.

Name: CVP analysis makes all of the following assumptions except a change i
Uploaded: 2024-03-20T06:32:37.000Z
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Description: CVP analysis makes all of the following assumptions except a change in volume is the only factor that affects costs. revenues are linear throughout the relevant range. the mix of products will not change. inventory levels will increase.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Which of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.
Please explain the statement below thourougly with an example to illustrate the answer. "A product with a high gross profit could be an unprofitable product".
Which of the following is not a potential advantage of variable costing relative absorptioncosting?a. Net income computed under variable costing is unaffected by changes productionlevels.b. It is easier to understand the impact of fixed and variable costs on computation of netincome when variable costing is used.c. The use of variable costing is consistent with cost-volume-profit analysis.d. Net income computed under variable costing is not closely tied to changes in sales level.
Analyzi.ng a cost-volume-profit graph Determine each change effects the elements of the cost-volume profit graph by placing an X in the appropriate column(s).
There are two questions, please find the answers
On the cost-volume-profit graph, which of the following would result into an increase in the breakeven point (Assuming other factors remain unchanged)? O a. None of the given answers O b. Increase in number of units sold O c. Decrease in variable cost per unit O d. Decrease in selling price per unit Oe. Decrease in fixed costs
On the costvolume - profit graph which of the following would result into a decrease in the breakeven point (Assuming other factors remain unchanged )? a. Decrease in number of units sold b.Decrease in selling price per unit c. Increase in fixed costs d. Decrease in variable cost per unit e. None of the given answers
If the percentage change in operating income resulting from a given percentagechange in sales is higher than the percentage change in sales itself, thena. an increase in the selling price would not alter the contribution marginper unit.b. variable costs per unit have increased.c. variable costs have decreased in total.d. the company has operating leverage.e. the company has no fixed costs.
For each situation, list the assumption, principle, or constraint that has been violated, if any. List only one answer for each situation. a. East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain. choose one of the assumption, principle or constraint Going concern assumptionPeriodicity assumptionNo violationHistorical cost principleRevenue recognition principleEconomic entity assumption b. Hilo Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.) choose one of the assumption, principle or constraint Historical cost principleGoing concern assumptionRevenue recognition principleNo violationPeriodicity assumptionEconomic entity assumption c. Gomez, Inc. is…
What is the main criticism of LIFO? A. It presents a balance sheet figure that is out-of-date. B. It artificially creates a higher income. C. It utilizes a unit cost that has no evidence of existence. D. It is often complicated to implement, especially if inventory costs change frequently.
Production is less than sales. i.e. closing inventory is reducing Absorption costing will produce a lower profit Why?
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs can be divided into variable and fixed components O b. Costs are nonlinear Fixed cost per unit is not constant О с. O d. Sales mix of products sold does not change e. Selling price per unit does not change with volume O O 0 O O

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		a change in volume is the only factor that affects costs.
		revenues are linear throughout the relevant range.
		the mix of products will not change.
		inventory levels will increase.