Discussion
Which of the following is not an assumption of Break-Even Analysis ?
Answer: B
The statement that is not an assumption is total variable cost does not change.
Break-even analysis assumes that costs can be split into fixed and variable parts, that total fixed cost stays constant over the relevant range, that variable cost per unit stays constant, so that total variable cost rises in direct proportion to output, that the selling price and general price level stay unchanged, and that the product mix is constant.
If total variable cost did not change, it would behave as a fixed cost and there would be no break-even point to find. The other three options are standard assumptions.
No comment is present. Be the first to comment.
Loading…
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development