Reference no: EM132970800

Problem 1: Which of the following statements are accurate about cost-volume-profit analysis? (Check all that apply.)

Option 1: When the total fixed costs increase, the break-even point decreases.
Option 2: When the sales price increases, the break-even point decreases.
Option 3: When the variable cost per unit increases, the break-even point increases.
Option 4: When the variable cost per unit increases, the break-even point decreases.

Problem 2: Which of the following are assumptions underlying cost-volume-profit analysis? (Check all that apply.)

Option 1: Sales revenue and costs are linear over a production volume range.
Option 2: Costs can be categorized as fixed or variable.
Option 3: Physical good inventory levels do not change substantially during an accounting period.
Option 4: Revenue and costs information is known, as opposed to estimated.