XYZ hdanufacturing produces a single product that sells for $133. Variable costs per unit equal $53. The company expects total xed costs to be $51333 for next year at the current sales level of 1.333 units. In an attempt to improve performance. management is considering 2 alternative actions. Each alternative action is to be evaluated separately. 19. Suppose management believes that a $43.333 increase in advertising {axed cost) will result in a considerable increase in sales. If sales increase by T33 units. what will be the increase in net income? a. $2.433 b. $3.433 c. $4.433 d. $5.433 23. Suppose management believes that a 13% reduction in the selling price will result in a 45% increase in sales. chis proposed reduction in selling price is implemented. HINT: Compute the original total CM and compare it to the new total CM. a. net income will decrease by $3.633. b. net income will increase by $9.353. c. net income will decrease by $9.353. d. net income will increase by $3.533. 21. statements is TRUE concerning operating leverage?r a. The greater the degree of operating leverage. the more that changes in xed costs will a'ect variable costs. Firms with higher degrees of operating leverage are less risky than rms with lower degrees of operating leverage. c. Firms with lower degrees ofoperating leverage have a high level ofxed costs in their cost structure. d. The greater the degree of operating leverage. the more that changes in sales activity will a'ect prots. 24. Which of the following statements is TRUE if both fixed expenses and the sale price per unit increase while variable costs per unit are unchanged? Breakeven point in units could increase, decrease, or remain the same B. Breakeven point in units increases C Breakeven point in units decreases . Breakeven point in units remains unchanged 23. a. As long as the total contribution margin is a positive number, net income will be positive. As long as total variable costs are more than total fixed costs, net income will be negative. C. As long as the total contribution margin is greater than total fixed costs, net income will be positive. d. As long as the sales price per unit is greater than fixed costs per unit, net income will be positive. 24. The following information pertains to Neptune Company's cost-volume-profit relationships: Break-even point in units sold 1,000 Variable costs per unit $500 Total fixed costs $150,000 HINT: Work backwards to find the selling price based on the above information using the X- formula. How much will be contributed to net income by the 1,001st unit sold? a. $650 b. $500 C. $150 d. so25. is the process of varying key variables to identify those variables that are the most critical to a decision a. The graph method b. A sensitivity analysis C. The degree of operating leverage d. Sales mix 26. Below you will find a C-V-P Graph with a breakeven point equal to 2,000 units and breakeven sales dollars equal to $30,000. The variable cost per unit is equal to $15.00 . $12.50 $10.00 $7.50 . $5.00 50,000 Total revenue 45,000 Profit area 40,000 Break-even point 35,000 Varia