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All of these are assumptions underpinning CVP analysis, except:Group of answer choicescost behaviour is assumed to be linear.costs can be readily classified as fixed or variable.costs can be divided into direct materials, direct labour and overhead.for multi-product entities it is assumed the sales mix remains consta

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All of these are assumptions underpinning CVP analysis, except:Group of answer choicescost behaviour is assumed to be linear.costs can be readily classified as fixed or variable.costs can be divided into direct materials, direct labour and overhead.for multi-product entities it is assumed the sales mix remains consta

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Solution

The statement that does not underpin CVP (Cost-Volume-Profit) analysis is: "costs can be divided into direct materials, direct labour and overhead."

CVP analysis is primarily concerned with how selling prices, sales volume, variable costs, fixed costs, and the mix of products sold affects a company's profit. While it's true that costs can be divided into direct materials, direct labour, and overhead, this classification is not a fundamental assumption of CVP analysis. Rather, CVP analysis assumes that total costs can be separated into fixed and variable components, regardless of their specific nature.

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Similar Questions

An assumption of CVP analysis is that:Group of answer choicescost behaviour can be classified as fixed or variable.only fixed costs are assumed to behave in a linear manner across the relevant range.all costs can be classified as either traceable or non-traceable.for multi-product entities, the sales mix between the products varies.

Multiple Select QuestionSelect all that applyManagers make assumptions in CVP analysis. These assumptions include: (Check all that apply.)Multiple select question.constant fixed cost per unit.some units produced are not sold.unit sales do not change.costs are linear within the relevant range.costs can be classified as variable or fixed.total variable costs do not change.

CVP analysis is most important for the determination of .a.relationship between revenues and costs at various levels of operations .b.variable revenues necessary to equal fixed costs .c.sales revenue necessary to equal fixed costs .

Fill in the Blank QuestionFill in the blank question.CVP analysis looks at how _ is affected by sales price per unit, variable costs per unit, volume, and fixed costs.

Multiple Choice QuestionCVP analysis relies on all of the following assumptions except:Multiple choice question.sales mix is constantcosts must be linear within the relevant rangemixed costs can be usedinventory levels do not change

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