Which of the following is an assumption of break-even analysis?
a. Fixed expenses remain constant for all levels of sales volume.
b. Variable expenses change in direct proportion to changes in sales volume.
c. Changes in sales volume have no effect on unit sales price.
d. All of the above
Expert Answer
d. All of the above
Reason: (a), (b) and (c) are the characteristics of the break-even analysis which is defining the assumption. Fixed cost remains always unchanged and variable cost changes. The sales volume change is
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