Question

Which of the following is an assumption of CVP​ analysis? A. When​ graphed, total costs curve upward. B. The unitminus−selling price is variable as it is subject to demand and supply. C. Total costs can be divided into inventoriable and period costs with respect to the level of output. D. Total costs can be divided into a fixed component and a component that is variable with respect to the level of output.

Answer 1

Answer:

The answer is D

Explanation

Cost-volume-profit analysis (CVP analysis) helps a business in planning and decision-making.

It provides information regarding changes in profits and costs brought about by changes in volume or level of activity. Assumptions include; costscan be divided into fixed and variable component, inventory level does not change from from period to period, selling price is constant