Ratios can be used to analyze a company's ability to pay longterm debt. True False

Which of the following is NOT a benefit of benchmarking?

A.

It helps companies develop budgets to assist in meeting performance goals.

B.

It can be used to compare a company's budgets to other leading companies through the use of industry averages.

C.

It helps companies determine where they can improve.

D.

It does not help management highlight company problems.

A small business produces a single product and reports the following data:

Sales price	$8.00		per unit
Variable cost	$5.00		per unit
Fixed cost	$23,000		per month
Volume	10,500		units per month

The company believes that the volume will go up to 13,000 units if the company reduces its sales price to $7.25. How would this change affect operating income?