- 10 Marks
MA – L2 – Q53 – Cost-volume-profit (CVP) analysis
Evaluate four assumptions required for valid cost-volume-profit analysis.
Question
(a) For any cost volume profit analysis to be valid, a number of important assumptions must reasonably be satisfied within the relevant range. As a management accountant for your organization, evaluate any four assumptions that must be satisfied in cost-volume-profit analysis.
(b) Determine the number of units at the break-even point.
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