Which of the following assumptions of the CVP graph is not true? Multiple Choice Costs are linear. Total fixed expenses are constant within the relevant range. Variable costs go down as volume goes up. The selling prices do not change. Volume is the only factor affecting total cost.
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A: Answer
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- With regard to the CVP graph, which of the following statements is NOT correct? a. The CVP graph assumes that volume is the only factor affecting total cost. b. The CVP graph assumes that fixed expenses are constant in total within the relevant range. c. The CVP graph assumes that selling prices do not change. d. The CVP graph assumes that variable costs go down as volume goes up.How do costs behave when there is a change in volume?a) ______ increases or decreases in total in direct proportion to increases or decreases in sales volume. b) ______ remains the same in total, regardless of change in sales. c) ______ have both a variable and fixed component. d) Answer the following regarding the high-low method:i) What is the formula for determining the variable costs when using the high low method:ii) Given the following information for the high and low levels, what is the variable cost per unit and the total fixed costs? iii) Based on the information in part ii), what is the relevant range?In MyAccountingLab, complete Try It! 21-1 and S21-1 through S21-3.LO2. What is contribution margin, and how is it used to compute operating income?a) What is the contribution margin if net sales revenue is $100,000 and variable costs are $40,000? b) Based on the information in part a), what is the contribution margin ratio?In MyAccountingLab, complete Try It! 21-2 and S21-4 and…CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent with these assumptions, as volume decreases total Group of answer choices fixed costs decrease. variable costs remain constant. costs decrease. costs remain constant.
- Which one of the following is not an assumption of CVP analysis? The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant. All units produced are sold. All costs are variable costs.If the ordering cost triples in an EOQ model, while the remaining values stay constant, how will the EOQ change? How sensitive is the EOQ to variations in demand or costs?Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Selling price per unit does not change with volume b. Costs can be divided into variable and fixed components C. Fixed cost per unit is not constant d. Sales mix of products sold does not change O e. Costs are nonlinear
- Which of the following is not an underlying assumption of cost-volume-profit analysis? Multiple Choice O Selling price is constant. Variable costs per unit are constant. Net operating income is constant. Total fixed costs are constant within the relevant range.As volume increases, which of the following statements is NOT correct? Variable cost per unit will remain the same. Total variable costs will increase. Total fixed cost will remain the same. Average cost per unit will increase. OWhich one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant
- The line that begins at the origin on a CVP graph represents total expenses. total fixed expenses. total sales revenues. both the total expenses and the total sales revenues. Which of the following best describes the concept of a "constraint?" Expected future costs that differ among alternatives. None of the items in this list of answers. A benefit foregone by choosing one alternative course over another. The distribution of all products to be sold.Which one of the following statements is false? Multiple Choice O O O O Variable costs per unit remain the same regardless of the volume. Fixed costs per unit increase as the volume decreases. Total variable costs decrease as the volume increases. Total fixed costs remain the same regardless of volume within the relevant range. Total variable costs change with volume.Which of the following statements about CVP analysis is true? O a. Unit selling price, unit variable costs, and total fixed costs are known and remain constant . b. All of the given answers are false. O . Operating income calculations in CVP analysis are based on gross margin. O d The CVP analysis assumes that total variable costs remain the same over a relevant range .