5. Cost-volume-profit (CVP) analysis can be used as a sensitivity analysis technique to determine what the effect of certain internal decisions of management or external changes will be on profits, break-even and margin of safety figures. If all other factors were kept constant, the following will lead to an increase in profit: a. Decrease in selling price per unit. b. Decrease in sales volumes. c. Decrease in fixed costs. d. Increase in variable costs per unit. 6. Which one of the following statements is NOT an assumption of CVP analysis: a. All costs, manufacturing, administrative as well as marketing and selling costs are considered and can be separated into either fixed costs or variable costs. b. The analysis is always made within the relevant range. c. All the units that are manufactured are sold. d. CVP analysis applies to long-term planning only. 7. Which one of the following would be classified as a fixed cost? a. The routine, monthly maintenance of machinery b. The wood used in the production of furniture. c. The screws used in the production of a machine d. The piecemeal wages paid to workers assembling a product. 8. Which one of the following statements is correct, if the absorption costing method is applied? a. Net income fluctuates in direct proportion with changes in sales volume. b. Fixed production and fixed selling costs are considered to be product costs. c. Variable selling expenses are included in product costs. d. Unit product costs can change as a result of changes in the number of units manufactured