Several important assumptions underlie CVP analysis. Assumptions often help simplify and focus our analysis of sales and costs. A common application of CVP analysis is as a tool to forecast sales, costs, and income.

Assume that you are actively searching for a job. Prepare a one-half page report identifying (1) three assumptions relating to your expected revenue and (2) three assumptions relating to your expected costs for the first year of your new job. Expect 1 point for each.