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10) Contribution margin ratio is equal to A) contribution margin divided by net sales revenue B) net sales revenue per unit minus variable costs per unit C) net sales revenue minus variable costs D) fixed costs divided by contribution margin per unit 11) Jenna Manufacturers produces flooring material. The monthly fixed costs are $10,000 per month 11) The unit selling price is $75 and variable cost per unit is $35. If Jenna's managers create a CVP graph from volume levels of zero to 500 units, at what sales level (in units) will the revenue and total cost lines intersect? D) 275 units A) 250 units C) 190 units B) 240 units 12) 12) The degree of operating leverage can be measured by A) dividing the fixed costs by contribution margin B) multiplying the contribution margin to sales revenue C) dividing the contribution margin by operating income D) dividing the fixed costs by the sales price per unit 3) Colin was a professional classical guitar player until a motorcycle accident left him d long months of therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly operating costs are as follows: Rent and utilities S 800 2,500 480 s and Other expenses Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and that anything past that point was pure profit. Colin is planning to increase the selling price to $750. What impact will the increase in selling price have on the contribution margin ratio? A) It will go up from 60% to approximately 63%. B) It will stay the same. C)It will go up 70% to 75% D) It will go down from 70% to approximately 67% 14) Which of the following formulae is the right formula for calculating contribution margin ratio?14) A) Contribution margin ratio Contribution margin Net sales revenue B) Contribution margin ratio Contribution margin Net sales revenue C) Contribution margin ratio Contribution margin x Net sales revenue D) Contribution margin ratio Contribution margin-Net sales revenue 5) Which of the following statements is true of the behavior of total variable costs, within the relevant 15) range? A) They will decrease as production decreases B) They will increase as production decreases C) They will decrease as production increases D) They will remain the same as production levels change