1 a 2 00 increase in a product s variable expense per 274020

1. A $2.00 increase in a product’s variable expense per unit accompanied by a $2.00 increase in its selling price per unit will:

A. Decrease the degree of operating leverage

B. Decrease the contribution margin

C. Have no effect on the break even volume

D. Have no effect on the contribution margin ratio?2. The break even point in unit sales is found by dividing total fixed expenses by

A. The contribution margin ratio

b. The variable expenses per unit

C. The sales price per unit

d. The contribution margin per unit

3. Which of the following would not affect the break even point?

a. Number of units sold

b. Variable expense per unit

c. Total fixed expenses

d. Selling price per unit

4. If a company increases its selling price by $2 per unit due to an increase in its variable labor cost of $2 per unit, the break even point in units will:

a. Decrease

b. Increase

c. Not change

d. Change but direction cannot be determined

5. To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used?

a. (Fixed expenses+ Target net profit)/Total contribution margin

b. (fixed expenses+ Target net profit)/Contribution margin ratio

c. Fixed expenses/Contribution margin per unit

d. Target net profit/Contribution margin ratio