26. Sales mix refers to:

A)The portion of unit variable costs that are consumed by each product

B)The absolute portion of total variable costs consumed by each product

C)The relative portion of unit or dollar sales that are derived from each product

D)None of the above

27. Which of the following statements regarding sales mix is true?

A)A shift in the sales mix can have a significant impact on the bottom line.

B)One of the limiting assumptions of the basic cost-volume-profit model is that the analysis is for a single product or the sales mix is constant.

C)Sales mix analysis is important in multiple-product or service organizations.

D)All of the above are true

28. Operating leverage is best described as:

A)A measure of the extent to which an organization's costs are fixed

B)A measure of the extent to which an organization's contribution margin is sensitive to levels of debt

C)A measure of the extent to which an organization's operations are financed by debt

D)A measure of the extent to which an organization's profits contribute to reductions in debt

E)None of the above

29. Operating leverage is computed as:

A)Contribution margin divided by income before taxes

B)Fixed costs divided by income before taxes

C)Income before taxes divided by total debt

D)Operating income divided by total debt

30. All else being equal, this is true about a firm with high operating leverage relative to a firm with low operating leverage:

A)A higher percentage of the high operating leverage firm's costs are fixed

B)The debt payments limit the high operating leverage firm's opportunities to turn a big profit

C)The high operating leverage firm has more debt

D)The high operating leverage firm is exposed to less risk