Assumptions underlying cost-volume-profit analysis include all of the following, except:
Total costs are directly proportional to volume over the relevant range.
Selling prices are to be unchanged.
Volume is the only relevant factor affecting cost.
All costs can be divided into fixed and variable elements.
Choice "A" is correct. Only total variable costs are directly proportional to volume over the relevant range.Choices "d", "b", and "c" are incorrect, because all are underlying assumptions of cost-volume-profit.
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