Which of the following statements regarding assumptions and limitations of CVP analysis is not correct? Multiple Choice If unit prices change (for example, if the unit prices are lower for higher volumes), CVP analysis cannot be used. CVP analysis relies on certain assumptions and these assumptions might limit the applicability of the results for decision making. CVP analysis is a tool that the manager can use to help with decisions. The assumptions of constant unit variable cost and constant unit prices for all levels of volume as important limitations of CVP analysis. The limitations are due to the assumptions that the cost analyst makes; that is, they are not inherent limitations to the method of CVP analysis itself.
Which of the following statements regarding assumptions and limitations of CVP analysis is not correct? Multiple Choice If unit prices change (for example, if the unit prices are lower for higher volumes), CVP analysis cannot be used. CVP analysis relies on certain assumptions and these assumptions might limit the applicability of the results for decision making. CVP analysis is a tool that the manager can use to help with decisions. The assumptions of constant unit variable cost and constant unit prices for all levels of volume as important limitations of CVP analysis. The limitations are due to the assumptions that the cost analyst makes; that is, they are not inherent limitations to the method of CVP analysis itself.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 24GI: List the acceptable cost flow assumptions under IFRS. Be sure to explain the reasoning as to why...
Related questions
Question
Which of the following statements regarding assumptions and limitations of CVP analysis is not correct?
Multiple Choice
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If unit prices change (for example, if the unit prices are lower for higher volumes), CVP analysis cannot be used.
-
CVP analysis relies on certain assumptions and these assumptions might limit the applicability of the results for decision making.
-
CVP analysis is a tool that the manager can use to help with decisions.
-
The assumptions of constant unit variable cost and constant unit prices for all levels of volume as important limitations of CVP analysis.
-
The limitations are due to the assumptions that the cost analyst makes; that is, they are not inherent limitations to the method of CVP analysis itself.
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