22 ) A weakness of break-even analysis is that it assumes

A) revenue and costs are a linear (constant) function of volume.

B) sales prices and costs increase when the economy is strong and confidence is high.

C) the cost of goods sold goes up as revenue increases.

D) None of the options are true.

23 ) The degree of operating leverage is computed as

A) percent change in operating profit divided by percent change in net income.

B) percent change in unit volume divided by percent change in operating profit.

C) percent change in EPS divided by percent change in operating income.

D) percent change in operating income divided by percent change in unit volume.

24 ) Pressure to increase current asset buildup often results from

A) a decline in sales growth.

B) rapidly expanding sales.

C) increased demands of short-term creditors.

D) None of the options are true.