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Please solve CVP assumptions Identify which of the CVP assumptions is violated in each of the circumstances described below: Assumption Circumstances x a. Price per
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CVP assumptions Identify which of the CVP assumptions is violated in each of the circumstances described below: Assumption Circumstances x a. Price per unit declines as the volume of sales and production increase. b. Labor productivity increases as the volume of production declines. x c. The sales mix in a multiproduct firm varies as the volume of total sales changes. x d. Mixed cost cannot be separated into variable and fixed components. e. Costs behave according to a curvilinear function. * f. Sales and production volume differ. g. Fixed cost and capacity can be adjusted within the period. CVP Assumptions 1. All variable costs are constant per unit within the relevant range and total fixed cost is constant within the relevant range. 2. Mixed costs can be accurately separated into their fixed and variable components. 3. No capacity additions will be made within a period. 4. Revenue is constant per unit within the relevant range. 5. Sales and production are equal. 6. The sales mix remains constant as volume changes within the relevant range. 7. Variable costs are constant per unit within the relevant range. Labor productivity will not change. CVP assumptions Identify which of the CVP assumptions is violated in each of the circumstances described below: Assumption Circumstances x a. Price per unit declines as the volume of sales and production increase. b. Labor productivity increases as the volume of production declines. x c. The sales mix in a multiproduct firm varies as the volume of total sales changes. x d. Mixed cost cannot be separated into variable and fixed components. e. Costs behave according to a curvilinear function. * f. Sales and production volume differ. g. Fixed cost and capacity can be adjusted within the period. CVP Assumptions 1. All variable costs are constant per unit within the relevant range and total fixed cost is constant within the relevant range. 2. Mixed costs can be accurately separated into their fixed and variable components. 3. No capacity additions will be made within a period. 4. Revenue is constant per unit within the relevant range. 5. Sales and production are equal. 6. The sales mix remains constant as volume changes within the relevant range. 7. Variable costs are constant per unit within the relevant range. Labor productivity will not change Step by Step Solution
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