Question 16 Operating leverage ratio indicates what percent decline in sales could be sustained before the company would operate at a loss. True False Question 17 Which of the following statements is TRUE? o If total fixed costs decrease while the sales price per unit and variable costs per unit remain constant, the breakeven point decreases. The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents the total fixed costs. o If employees accept a wage contract that increases the unit contribution margin, the break-even point will increase. o If variable costs go up, and all other factors remain the same, the margin of safety will shrink. Question 18 In the middle of the year, the price of Luvdisc Corporation's major raw material increased by 8%. How would this increase affect the company's break-even point (BEP) and margin of safety (Mos)? O BEP: Decrease Mos: Decrease O BEP: Decrease MoS: Increase BEP: Increase Mos: Decrease O BEP: Increase Mos: Increase Question 19 If a company changes its cost structure with an increase in fixed costs and a decrease in per-unit variable costs. The change o increases risk and increases potential profit. o decreases risk and decreases potential profit. o decreases risk and increases potential profit. increases risk and decreases potential profit. Question 20 Committed fixed costs cannot be reduced to zero without seriously impairing the company's long term goals. True O False