List the assumptions required to identify relevant information in cost-volume-profit analysis.

The following assumptions identify relevant information required to complete a CVP analysis:

Changes in the sales volume and production (or purchase) volume are identical (purchase
volume would apply to a merchandiser). The ending balances in all inventories are zero. EEverything purchased is used in production; everything produced is sold. For a merchandiser, the sales volume of finished goods purchased for resale is identical to the sales volume sold.

All costs are classified as either fixed (FC) or variable (VC) with no mixed costs. The fixed costs include both manufacturing and non-manufacturing fixed costs. The total variable costs include both manufacturing and non-manufacturing variable costs.

All cost behaviour is linear (a straight line) within the relevant volume range.

The sales price per unit, variable costs per unit, and total fixed costs and sales (or production) volume are known. The MIS provides all of this information.

Either the product sold or the product mix remains constant, although the volume changes.

All revenue and costs can be calculated and compared without considering the timevalue of money.