CVP analysis

fenil 16 April 2020 at 16:00 PM

In order for CVP to work mathematically, a number of assumptions need to be made. Which of the following are not assumptions used in CVP analysis? I. All costs can be separated into variable or fixed costs. II. Fixed costs per unit remain unchanged over the relevant range of production. III. Variable costs per unit remain unchanged over the relevant range. IV. The time value of money is considered in the calculation of breakeven revenue. a) I and III only. b) II and III only. c) I and IV only. d) II and IV only.

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FACULTY 17 May 2020 at 03:20 PM

II and IV only.(option D)

Fixed costs per unit remain unchanged over the relevant range of production.

The time value of money is considered in the calculation of breakeven revenue. 

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