Question

According to the assumptions of CVP, ______ will not change as the volume of a product increases or decreases. total variable cost price total contribution margin unit fixed cost

Answer 1

Answer:

Fixed costs, sales price, and variable cost per unit

Explanation:

Cost-volume-profit (CVP) analysis is a cost accounting technique that examines how operating profit is affected by varying levels of costs and volume. Another name for CVP is break-even analysis because for different sales volumes and cost structures, it provides the break-even point (BEP) for different sales volumes and cost structures. BEP can assist managers during the short-term economic decision making.

Some of the assumptions of CVP are that fixed costs, sales price, and variable cost per unit will not change even when the volume of a product changes. The change in the volume of a product can either be an increase or a decrease.

Therefore, according to the assumptions of CVP, fixed costs, sales price, and variable cost per unit will not change as the volume of a product increases or decreases.

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