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9. What are selling, general and administrative costs considered sticky? a. These costs increase more when sales increase than they decrease when sales decrease by

9. What are selling, general and administrative costs considered sticky?

a.

These costs increase more when sales increase than they decrease when sales decrease by the same amount.

b.

These costs increase less when sales increase than they decrease when sales decrease by the same amount.

c.

These costs increase the at the same rate when sales increase and decrease at the same rate when sales decrease by the same amount.

d.

None of the answers are correct.

10. If all the data points were on a line, the r-square would be

a.

zero.

b.

one.

c.

two.

d.

impossible to interpret.

11. A financial model is only as good as

a.

the rate of growth in the economy.

b.

the companys operating leverage.

c.

the assumptions it uses and the data it uses.

d.

None of the answers are correct.

12. How does cost-volume-profit analysis allows management to determine the relative profitability of a product?

a.

By highlighting potential bottlenecks in the production process.

b.

By keeping fixed costs to an absolute minimum.

c.

By determining the contribution margin and projected profits at various levels of production.

d.

By assigning costs to a product in a manner that maximizes the contribution margin.

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