Answer:
In order to perform cost-volume-profit analysis, a company must be able to identify its variable and fixed cost.
The correct answer is A
Step-by-step explanation:
One of the assumptions of C-V-P analysis is that cost is accurately divided into fixed and variable. To perform cost-volume-profit analysis, a company needs to ascertain the fixed cost. Variable cost is also required in order to determine the contribution margin and contribution margin ratio. Break-even point in units is the ratio of fixed cost to contribution margin while break-even point in dollars is the ratio of fixed cost to contribution margin ratio.