Which of the following is not an assumption made in cost-volume-profit analysis? OOOOO Costs can be divided into mixed and variable costs. Inventory quantities are the same at the beginning and end of the period. The sales mix is constant. Cost assumptions are valid across the relevant range. Total sales and costs are linear. Which of the following statements is incorrect with regard to the two decision-making scenarios discussed? Management should consider how freed up capacity will be used if a component is purchased from an outside supplier rather than being manufactured in house. If production of a component is outsourced, the company will typically eliminated all variable product costs related to the component. Common fixed costs that are allocated to segments are treated as traceable fixed costs. If a segment is dropped, the company's operating income will decrease by the segment's total segment margin. If a segment's sales volume increases by a certain percentage, its total contribution margin will increase by the same percentage. Holding all other variables constant, in which of the following situations will the breakeven point decrease? OOOOO Total variable costs increase. Contribution margin decreases. Contribution margin percentage increases. Sales price decreases. Total fixed costs increase. Which of the following statements accurately describes the capital investment analysis tools available to managers? OOOO The net present value method calculates if the future value of the net future cash flows exceeds or falls short of the initial investment. The average rate of return method considers the time value of money. The internal rate of return method calculates the investment's true return from a present value perspective. The cash payback method considers the investment's cash flow beyond the payback period. All of the above statements accurately describe the capital investment analysis tools available to managers. Which of the following statements is true with regard to cost behavior? OOOOO Mixed costs are constant in total. Fixed costs, calculated on a per unit basis, are directly related to the change in activity level. Variable costs do not change in total as the activity level changes. The identification of an activity base is important for determining cost behavior. Cost behavior equations should only be used for activity levels outside of the relevant range