All of the following are assumptions of cost-volume-profit analysis except

Step 1: Define the Problem

Identify the key components of the question that need to be addressed: Determine which statement is not an assumption of cost-volume-profit (CVP) analysis.

Step 2: Break Down the Problem

Divide the problem into smaller, manageable parts:

1. List the common assumptions of CVP analysis.
2. Identify the statement that does not align with these assumptions.

Step 3: Apply Relevant Concepts

Use appropriate academic theories or formulas to solve each part of the problem:

• CVP analysis typically assumes:
  1. Costs can be classified as either variable or fixed.
  2. The behavior of costs and revenues is linear throughout the relevant range.
  3. All units produced are sold (no inventory changes).
  4. Sales mix remains constant when multiple products are involved.

Step 4: Analysis, Verify and Summarize

Analyze each part in detail if necessary, carry out the calculations by steps. Verify the calculations result and summarize the findings:

• Compare the given options to the list of assumptions to identify the exception.

Final Answer

The statement that is not an assumption of cost-volume-profit analysis is the one that does not fit the typical assumptions listed above.