Lecture 4: Worm-up questions: True/False1. If a company increases fixed costs, then the breakeven point will be lower. 2. For merchandising firms, contribution margin will always be a lesser amount than gross margin. 3. If Johnson’s Manufacturing presented a Financial Accounting Income Statement emphasizing gross margin showing operating income of $18,000, a Contribution Income Statement emphasizing contribution margin would show a different operating income. 4. An expected value is the weighted average of the outcomes, with the probability of each outcome serving as the weight. MCQs:5. Cost-volume-profit analysis assumes all of the following EXCEPT: a. all costs are variable or fixed b. units manufactured equal units sold c. total variable costs remain the same over the relevant range d. total fixed costs remain the same over the relevant range
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