If sales volume decreases, and all other factors remain unchanged, the contribution margin ratio will decrease - Vf. 1. 2. In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be higher in the company with a higher proportion of foxed expenses in its cost structure of 3. At the break-even point, the total contribution margin and fixed expenses are equal. UT 4 5 6. 7. Al other things the same, an increase in total foxed expenses will increase the break-even point. T All other things the same, a reduction in the variable expense per unit will decrease the break-even point. UY All other things the same, an increase in variable expense per unit will reduce the break-even point. VY For a capital Intensive, automated company the break-even point will tend to be higher and the margin of safety will be lower than for a less capital intensive company with the same sales of The margin of safety in dollars equals the excess of actual sales over budgeted sales. Ut If two companies produce the same product and have the same total sales and same total expenses, operating leverage will be higher in the company with a higher proportion of fixed expenses in its cost structure. UY 8 9. - 10. The contribution margin ratio is equal to: A. Total manufacturing expenses/Sales. B. (Sales - Variable expenses)Sales. C. 1 - (Gross Margin/Sales). D. 1 - (Contribution Marginales). Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: 11. A. Option A B. Option B C. Option D. Option D