Question 1
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 2
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 3
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 4
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.

    • 7 years ago
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