On a CVP graph for a profitable company, the total expense line will be steeper than the line representing fixed costs. True False 2 Data concerning Lancaster Corporation's single product appear below: Per unit percent of sales selling price 200 100% Variable expenses 60 30% Contribution margin $140 70% Fixed expenses are $105,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by $44. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change? a Decrease of $38,400 b Decrease of $5,600 c Increase of $38,400 d Increase of $5,600 3. The production budget is typically prepared prior to the sales budget. True False