Which of the measures the extent to which the entity's cost function is made up of fixed costs?

Select one:

a. Margin of safety.

b. Operating leverage.

c. Fixed cost leverage.

d. Total contribution margin

Kaitlyn's Cakes had the following activity for December:

Total cakes sold 23,000 Total revenues $500,000 Total fixed costs 99,000 Total variable costs 350,000

What was Kaitlyn's margin of safety, in dollars?

Select one:

a. $347,500

b. $330,000

c. $170,000

d. $247,500

If sales are $160,000, variable costs are $100,000, and fixed costs are $40,000, the contribution margin ratio is:

Select one:

a. 25.0%

b. 62.5%

c. 12.5%

d. 37.5%

At a breakeven point of 20,000 units, the variable costs were $30,000 and the fixed costs were $80,000. What will the next (i.e., 20,001^st) unit sold contribute to profit before income taxes?

Select one:

a. $5.50

b. cannot be determined

c. $4.00

d. $1.50

The profit equation can be expressed as:

Select one:

a. Profit = [Selling Price - Variable Costs *Q] - Fixed Costs

b. Profit = [Selling Price - Variable Costs) * Q] - Fixed Costs

c. Profit = [Selling Price - Fixed Costs) * Q] - Variable Costs * Q

d. Profit = [Selling Price + Fixed Costs) * Q] - Variable Costs

When the assumption of linearity is applied to revenue in CVP analyses:

Select one:

a. the sales mix and all of the prices remain constant.

b. the sales mix remains constant, but prices decrease as volumes increase.

c. fixed cost per unit increases as revenue decreases.

d. variable cost per unit is linear with respect to total revenue.