LO1: To estimate what the profit will be at various levels of activity, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. True False LO2: On a CVP graph for a profitable company, the total expense line will be steeper than the total revenue line. True False LO3: If the variable expense per unit decreases, and all other factors remain the same, the contribution margin ratio will increase. True False LO4: For a given level of sales, a low contribution margin ratio will produce more net operating income than a high contribution margin ratio. True False LO5: If fixed expenses increase by $10,000 per year, then the sales needed to break even will generally increase by more than $10,000. True False LO6: The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the target profit by the contribution margin ratio. True False LO7: Fawn Company's margin of safety is $90,000. If the company's sales drop by $80,000, it will still have positive net operating income. True False LO8: A company with high operating leverage will experience a larger reduction in net operating income in a period of declining sales than a company with low operating leverage. True False LO9: A shift in the sales mix from products with high contribution margin ratios toward products with low contribution margin ratios will raise the break-even point for the company as a whole. True False