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21. Perform Break-Even Sensitivity Analysis for a Single Product Under Changing Business Situations a. If the selling price of a product is increased, will the
21. Perform Break-Even Sensitivity Analysis for a Single Product Under Changing Business Situations a. If the selling price of a product is increased, will the breakeven point increase or decrease? b. If the variable cost of a product is decreased, will the breakeven point increase or decrease? c. If a company's fixed costs decrease, will the breakeven point increase or decrease? d. If a company increases its contribution margin ratio from 30% to 35%, will it need to produce more or fewer units to break even? 22. Calculate and interpret a Company's Margin of Safety and Operating Leverage a. What is the formula for the margin of safety? _ b. A company with a higher margin of safety is less likely to suffer a loss during an economic downturn. True or False? 1 c. What is the formula for the degree of operating leverage? d. A company with a higher degree of operating leverage is less likely to suffer a loss during an economic downturn. True or False? e. If a company has an operating leverage of 2.5 and experiences a 10% Increase in sales, how will their net income be affected? f. Will a company that has greater fixed costs or greater variable costs have a higher degree of operating leverage
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