Paragraph Styles True/False (2 Points) 1. The break-even point is the number of units or sales dollars that must be sold to achieve zero profit True 2. The contribution margin per unit is the amount each unit sold contributes to covering fixed costs and increasing profit 3. Contribution margin per unit is calculated by subtracting variable costs per unit and fixed costs per unit from the selling price per unit. 4. Sensitivity analysis is also called "what-if analysis." True 5. Sensitivity analysis can be used to determine how changes in variables will impact target profit. 6. Operating leverage refers to the level of fixed costs within an organization. 7. A company makes four products. If it sells everything it produces and is only constrained by finding enough skilled labor, then its goal should be to maximize the contribution margin per labor-hour. 8. The only difference between absorption costing and variable costing is the treatment of fixed manufacturing overhead costs. 9. Absorption costing treats fixed manufacturing overhead costs as product costs. 10. An advantage of using absorption couting is that it prevents managers from increasing production solely for the purpose of inflating profit