Which of the following is NOT an assumption of cost-volume-profit analysis? Question 10 options: Inventory levels will change as production levels vary. Managers can classify each cost as either variable or fixed, and mixed costs can be broken down into their variable or fixed component. Revenues are linear throughout the relevant range of volume. The sales mix remains constant.

The question is based on the concept of Cost Accounting.Inventory levels will change as production levels vary is not an assumption of cost-volume-profit analysis. The following are the assumption of CVP analysis:• The price per unit does not change as a number of units changes.• Each cost can be classified as variable, fixed, or mixed.• Change in volume is the only factor that affects the total costs.• Fixed cost always remains constant; it does not change.• Total of production is always equal to a number of sales; there is no change in inventory level.

Answered: Which of the following is NOT an…

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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Which of the following is NOT an assumption of cost-volume-profit analysis?

Question 10 options:

	Inventory levels will change as production levels vary.
	Managers can classify each cost as either variable or fixed, and mixed costs can be broken down into their variable or fixed component.
	Revenues are linear throughout the relevant range of volume.
	The sales mix remains constant.

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