1. Which of the following assumptions is false in a cost-volume-profit analysis? Total sales and total costs can be represented by straight lines. Within the relevant range of operating activity, the efficiency of operations does not change. Costs can be divided into fixed and variable components. There are changes in the inventory quantities during the period.
1. Which of the following assumptions is false in a cost-volume-profit analysis? Total sales and total costs can be represented by straight lines. Within the relevant range of operating activity, the efficiency of operations does not change. Costs can be divided into fixed and variable components. There are changes in the inventory quantities during the period.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4MCQ
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1. Which of the following assumptions is false in a cost-volume-profit analysis?
- Total sales and total costs can be represented by straight lines.
- Within the relevant range of operating activity, the efficiency of operations does not change.
- Costs can be divided into fixed and variable components.
- There are changes in the inventory quantities during the period.
2. Which of the following charts plot only a profit line rather than sales and cost lines?
- Cost-volume-profit chart
- Profit-volume chart
- Profit-cost chart
- Cost-volume chart
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