T F 4. Any business which operates at less than capacity will have larger fixed costs than variable T F 5. With variable costs, the cost per unit varies with changes in volume. T F 6. In a cost-volume-profit graph, the dollar amount by which actual sales exceed break-even costs. sales volume is called the margin of safety. The margin of safety sales volume times the contribution margin ratio equals operating income. T F 7. With fixed costs, the cost per unit varies with changes in volume. Cost-Volume-Profit Analysis 2) Multiple Choice (15 Points) Circle the letter that best answers each of the following 1. In the short-term, fixed costs A) Fall as sales volume falls B) Rise as sales volume rises C) Rise as sales volume falls D) Remain steady when sales volume changes