1. The behavior of both costs and revenues is linear throughout the relevant range of the activity   index.
  2. Cost can be classified accurately as either variable or fixed.
  3. Changes in activity are the only factors that affect costs.
  4. All units produced are sold.
  5. When more than one type of product is sold, the sles mix will remain constant. That is, the percentage that each product represents of total sales will stay the same. Sales mixed complicates CVP analysis because different products will have different costs relationships.