1. The ____________ represents the total sales available to pay for fixed costs and to generate an operating income.

1. Total contribution margin
2. Unit contribution margin
3. Break-even point
4. None of the above

2. The higher the contribution margin ratio the better the situation that means that the company has

1. low variable costs or the company has generated high revenues.
2. high variable costs or the company has generated high revenues.
3. low variable costs or the company has generated zero revenues.
4. None of the above

3. In breakeven analysis, if variable costs rise, then the breakeven point will

1. Fall
2. Rise
3. Remain same
4. None of the above

4. If a firm has sales equal to $500,000 and contribution margin equal to $250,000. What is the contribution margin ratio?

1. 50%
2. 40%
3. 2%
4. None of the above

5. The ____________ remain constant irrespective to the changes in the level of activity.

1. Average fixed cot
2. Total fixed cost
3. total variable cost.
4. none of the above

6. The __________ is the difference between the amount of sales and the break-even point.

1. Target profit
2. Contribution margin
3. Margin of safety
4. None of the above