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60.To compute the break-even point in units, which of the following formulas is used?a.FC/CM per unitb.FC/CM ratioc.CM/CM ratiod.(FC+VC)/CM ratioANSWER:a EASY61.A firm’s break-even point in dollars can be found in one calculation using which of the following formulas?62.The contribution margin ratio alwaysincreases when theEASY63.In a multiple-product firm, the product that has the highest contribution margin per unit willEASY
Chapter 11 Absorption/Variable Costing and Cost-Volume-Profit Analysis11–1764._____________ focuses only on factors that change from one course of action to another.a.Incremental analysisb.Margin of safetyc.Operating leveraged.A break-even chartANSWER:a EASY65.The margin of safety would be negative if a company(‘s)EASY66.The margin of safety is a key concept of CVP analysis. The margin of safety is theEASY67.Management is considering replacing an existing sales commission compensation plan with a fixed salary plan. If the change is adopted, the company’s
11–18Chapter 11 Absorption/Variable Costing and Cost-Volume-Profit Analysis68.As projected net income increases thea.degree of operating leverage declines.b.margin of safety stays constant.c.break-even point goes down.d.contribution margin ratio goes up.ANSWER:a MEDIUM