1. Contribution Margin ratio tells you for every dollar of sales how much is left over to cover fixed costs True False 2. If the fixed costs increases for a company and all other costs and revenue numbers remain the same, breakeven will decrease (easier to break even) True False 3. If sales decreases by $500 and fixed costs decreases by $3,000, break even will increase (harder to break even) True False 4. Margin of safety is not important and should be ignored. True False 5. If you create the contribution margin income statement using the break even sales amount for total sales your operating income or profit will be zero True False To calculate contribution margin ratio, I can use either total contribution margin or contribution margin per unit. 6. True False If sales increases by $1,000 and fixed costs increases by $600, the combined impact of these two changes will cause breakeven to decrease (easier to breakeven) 40 7 True False