Search

10 March, 2022

A number of limitations are commonly mentioned with respect to CVP analysis

 1. The analysis assumes a linear revenue functioand a linear cost function.2. The analysis assumes that what is produced issold.3. The analysis assumes that fixed and variable costs can be accurately identified.4. For multiple-product analysis, the sales mix is assumed to be known and constant.5. The selling prices and costs are assumed o beknown with certainty.