A company is trying to decide to pay employees a fixed salary or an hourly wage.

If the company decides to pay hourly wages, which statement is true?

$(2$pts$)$

Question $2-$ A company is trying to decide to pay employees a fixed salary or an hourly wage. If the company decides to pay hourly wages, which statement is true?

Hourly wages would increase the variable costs and decrease the contribution margin.

Hourly wages would decrease the variable costs and decrease the contribution margin.

Hourly wages would increase the variable costs and increase the contribution margin.

$3)$

A company is trying to decide if they should pay commissions to the salespeople based on their total sales.

If the company decides to pay their salespeople commissions as stated above, which statement is true?

$(2$pts$)$

Question $3-$ A company is trying to decide if they should pay commissions to the salespeople based on their total sales. If the company decides to pay their salespeople commissions as stated above, which statement is true?

Variable costs and the break$-$even point would decrease while the contribution margin and margin of safety would increase.

Variable costs and contribution margin would not be affected.

Variable costs and the break$-$even point would increase while the contribution margin and margin of safety would decrease.

$4)$

A company is considering purchasing a building. The purchase of the building will increase their fixed costs.

This purchase will $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ the break$-$even point?

$(2$pts$)$

Question $4-$ A company is considering purchasing a building. The purchase of the building will increase their fixed costs. This purchase will $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ the break$-$even point?

Decrease

Increase

Not affect

$5)$

A company is considering purchasing a building. The purchase of the building will increase their fixed costs.

This purchase will $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ the margin of safety?

$(2$pts$)$

Question $5-$ A company is considering purchasing a building. The purchase of the building will increase their fixed costs. This purchase will $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ the margin of safety?

Increase

Decrease

Not affect

$6)$

A company is considering purchasing a building. The purchase of the building will increase their fixed costs.

This purchase will $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ the degree of operating leverage?

$(2$pts$)$

Question $6-$ A company is considering purchasing a building. The purchase of the building will increase their fixed costs. This purchase will $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ the degree of operating leverage?

Decrease

Increase

Not affect