Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


The assumptions underlying the CVP analysis outlined in Chapter 8 are 1



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8.3
The assumptions underlying the CVP analysis outlined in Chapter 8 are
1
Total costs can be divided into a fixed component and a component that is variable with respect to the level of output.
2
The behaviour of total revenues and total costs is linear (straight line) in relation to output units within the relevant range.
3
The unit selling price, unit variable costs and fixed costs are known.
4
The analysis either covers a single product or assumes that a given revenue mix of products will remain constant as the level of total units sold changes.

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