In order for a CVP analysis to be accurate, certain assumptions must be met. These assumptions are:

- A change in volume is the only factor that affects costs

- Managers can classify each cost (or the components of a mixed cost) as either variable or fixed; these costs are linear throughout the relevant range of volume

- Revenues are linear throughout the relevant range of volume

- Inventory levels will not change

- The sales mix of products will not change

What do you think of these assumptions? Are they valid assumptions to make? Do any of them stand out as something not likely to occur?