Question 1 (1 point)

If a company sells one unit above its break-even sales volume, then its operating income would be equal to

Question 1 options:

	the fixed expenses.
	zero.
	the unit contribution margin.
	the unit selling price.

Question 2 (1 point)

A shift in the sales mix from a product with a high contribution margin ratio toward a product with a low contribution margin ratio will cause the break-even point to

Question 2 options:

	increase.
	increase or decrease, but the direction of change cannot be determined from the information given.
	decrease.
	remain the same.

Question 3 (1 point)

How do we calculate the unit sales volume necessary to reach a target profit?

Question 3 options:

	Target profit unit contribution margin
	(Fixed expenses + target profit) contribution margin ratio
	Target profit contribution margin ratio
	(Fixed expenses + target profit) unit contribution margin

Question 4 (1 point)

What is the margin of safety?

Question 4 options:

	The sales level at which operating income is zero
	The amount of fixed and variable costs that make up a company's total costs
	The excess of expected sales over break-even sales
	The difference between the sales price per unit and the variable cost per unit

Question 5 (1 point)

Target profit analysis is used to calculate the sales volume that is needed to

Question 5 options:

	cover all fixed expenses.
	earn a specific amount of net operating income.
	cover all expenses.
	avoid a loss.

Question 6 (1 point)

When a company is operating at its break-even point

Question 6 options:

	its contribution margin is equal to its variable expenses.
	its fixed expenses are equal to its variable expenses.
	its total revenues are equal to its total expenses.
	its selling price is equal to its variable expense per unit.

Question 7 (1 point)

If the operating leverage factor is 3, then a 2% change in the number of units sold should result in a 6% change in

Question 7 options:

	variable expense.
	operating income.
	sales.
	unit contribution margin.

Question 8 (1 point)

If the sales price of a product increases while everything else remains the same, what happens to the break-even point?

Question 8 options:

	The break-even point increases.
	The break-even point decreases.
	The break-even point remains the same.
	The effect cannot be determined without further information.

Question 9 (1 point)

The number of units to be sold to reach a certain target profit is calculated as

Question 9 options:

	Target profit contribution margin ratio.
	Target profit unit contributionmargin.
	(Fixed expenses + target profit) unit contribution margin.
	(Fixed expenses + target profit) contribution margin ratio.

Question 10 (1 point)

The break-even point on a CVP graph is

Question 10 options:

	the intersection of the sales revenue line and they-axis.
	the intersection of the sales revenue line and the total expense line.
	the intersection of the fixed expense line and the total expense line.
	the intersection of the fixed expense line and the sales revenue.