Cost-volume-profit analysis is a precise tool

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Reference no: EM131202214

1. Cost-volume-profit analysis is a precise tool for determining the profit consequences of future cost changes, price changes, and volume of activity changes.

True

False

2. The high-low method of deriving an estimated cost line uses all the data points available.

True

False

3. Cost-volume-profit analysis can be used to compute expected income from predicted sales and cost levels.

True

False

4. Which one of the following statements is not true?

Total variable costs decrease as the volume increases.

Total variable costs change with volume.

Total fixed costs remain the same regardless of volume within the relevant range.

Variable costs per unit remain the same regardless of the volume.

Fixed costs per unit increase as the volume decreases.

Reference no: EM131202214

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