Name: Chapter 21 351 8. If for Jones Inc. the contribution margin is $200,000 and operating income is $40,000, what is the operating leverage? a. 240,000 b. 160,000 c. 5 d. 0.2 9. In cost-volume-profit analysis, variable costs are costs that: a. increase per unit with an increase in the activity level b. decrease per unit with a decrease in the activity level c. remain the same in total at different activity levels d. remain the same per unit at different activity levels 10. CM Inc.'s sales are 40,000 units at $12 per unit, variable costs are $8 per unit, and fixed costs are $50,000. What is CM's contribution margin ratio? a. 23% b. 33% c. 50% d. 67% 11. B-E Co.'s fixed costs are $120,000, unit selling price is $30, and unit variable cost is $18. What is B-E's break-even point in units? a. 4,000 b. 6,667 c. 10,000 d. none of the above 12. Which of the following is a primary assumption of cost-volume-profit analysis? a. within the relevant range, the efficiency of operations does not change b. costs can be accurately divided into fixed and variable components c. sales mix is constant d. all of the above