Question
Evaluate whether each statement is true or false. 1. On a CVP graph, the break-even point will move up and to the right if a
Evaluate whether each statement is true or false.
1. On a CVP graph, the break-even point will move up and to the right if a company increases units sold. [ Select ] ["False", "True"]
2. Holding all else equal, if production decreases then the contribution margin ratio will remain the same but gross margin percentage will decrease. [ Select ] ["False", "True"]
3. If a company expects sales to decrease, it is better for the company to have low operating leverage. [ Select ] ["True", "False"]
4. If a company wishes to attain a target profit, it can divide that target profit by the contribution margin per unit to calculate how many units it must sell. [ Select ] ["False", "True"]
5. Holding all else equal, if a company expects sales to increase next month, it could calculate the additional profit it will generate using the additional sales in dollars and the contribution margin ratio [ Select ] ["False", "True"]
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