Which of the following is not an underlying assumption of co

Which of the following is not an underlying assumption of cost-volume-profit analysis?

Revenues and costs categorized as variable or fixed,

Revenues and costs behave in a linear manner

Units sold and produced are the same number

Fixed cost remains constant within the relevant range

Differences of units sold and produced are highlighted

Solution

The assumptions of CVP analysis are as follows:

- Costs can be categorized as variable or fixed.

- Revenues and costs behave in a linear manner.

- The number of units sold equals number of units produced.

- Fixed costs remain constant within a range.

However, differences of units sold and produced being highlighted is not an assumption of CVP analysis.