Cost-volume-profit (CVP) analysis is based on several assumptions. Which one of the following is not relevant for such an analysis —

CS Executive · Cost and Management Accounting · PYQS · December 2015
Cost-volume-profit (CVP) analysis is based on several assumptions. Which one of the following is not relevant for such an analysis —
(A) Inventory quantity changes in the year
(B) Sales mix of the products is constant
(C) Material price and labour rates do not change
(D) Behaviour of both sales and variable cost is linear throughout the year.

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Marginal Costing

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