CVP Analysis- Planning and Decision Making: Choose the best answer for each of the following questions:

a. If a firm has a negative contribution margin, to reach break-even:

(1) Sales volume must be increased. (2) Sales volume must be decreased. (3) Fixed cost must be decreased. (4) Fixed cost must be increased. (5) None of the above.

b. If total contribution margin is decreased by a given amount, operating profit would:

(1) Decrease by the same amount. (2) Decrease by more than the given amount. (3) Increase by the same amount. (4) Remain unchanged. (5) None of the above.

c. The break-even point would be increased by:

(1) A decrease in fixed costs. (2) An increase in contribution margin ratio. (3) An increase in variable costs. (4) A decrease in variable costs. (5) None of the above.