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    Simplifying assumptions that are made when using CVP

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    What are some simplifying assumptions that are made when using CVP? One limitations exists when using CVP?

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    Response CVP:
    What are some simplifying assumptions that are made when using CVP? One limitation exists when using CVP?

    CVP analysis means studying the relationship between prices, costs, volume and mix of products. As per CVP, costs are divided into variable and fixed categories. As smccd.net, CVP is based on following assumptions:
    1) Selling price is constant
    2) Costs are linear and can be accurately divided into variable ...

    Solution Summary

    Response explains the simplifying assumptions that are made when using CVP.

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