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SSC Financial and Cost Accounting P-1 QUESTION #6070
Question 1

Which of the following is not a standard assumption in cost-volume-profit (CVP) analysis?

  • Fixed costs per unit remain constant across all activity levels.✔️
  • The selling price per unit remains constant.
  • The variable cost per unit remains constant.
  • All units produced are sold during the same period.
Correct Answer Explanation

In CVP, Total Fixed Costs are assumed to be constant, which means Fixed Cost per unit actually changes (decreases) as volume increases. Thus, assuming unit fixed cost is constant is incorrect.