If q is the quantity of a product sold p is the price

14. If Q is the quantity of a product sold, P is the price per unit, V is the variable expense
per unit, and F is the total fixed expense, then the degree of operating leverage is equal
to: [Q(P-V)] ÷ [Q(P-V)-F]
AACSB: Analytic AICPA BB: Critical Thinking
AICPA FN: Reporting LO: 8 Level: Hard
lOMoARcPSD|7268017
15. A shift in the sales mix from products with high contribution margin ratios toward
products with low contribution margin ratios will raise the break-even point.
AACSB: Analytic AICPA BB: Critical Thinking
AICPA FN: Reporting LO: 9 Level: Medium
Multiple Choice Questions
16. Contribution margin can be defined as:
D AACSB: Reflective Thinking AICPA BB: Critical Thinking
AICPA FN: Reporting LO: 1 Level: Easy
17. Which of the following statements is correct with regard to a CVP graph?
B AACSB: Reflective Thinking AICPA BB: Critical Thinking
AICPA FN: Reporting LO: 2 Level: Easy
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition 6-9
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Chapter 6 Cost-Volume-Profit Relationships
18. If both the fixed and variable expenses associated with a product decrease, what will
be the effect on the contribution margin ratio and the break-even point, respectively?
Contribution margin ratio Break-even point
A) Decrease Increase
B) Increase Decrease
C) Decrease Decrease
D) Increase Increase
Ans: