Multiple Questions Answers

Question 9
A firm's break-even point will rise if:
A. fixed costs decrease.
B. contribution margins increase.
C. price per unit rises.
D. variable cost per unit rises.

Question 10
Which of the following is concerned with the change in operating profit as a result of a change in volume?
A. Financial leverage
B. Break-even point
C. Operating leverage
D. Combined leverage

Question 11
Cash breakeven analysis:
A. is helpful in analyzing the short-term outlook of the firm, particularly when it is in trouble financially.
B. is important when analyzing long-term profitability.
C. includes depreciation expense as a fixed cost when calculating the degree of financial leverage.
D. none of the above

Question 12
The degree of operating leverage may be defined as:
A. the percent change in operating income divided by the percent change in unit volume.
B. Q (P-VC) divided by Q (P-VC) - FC.
C. S - TVC divided by S - TVC - FC.
D. all of the above.