As the variable cost increases but the selling price remains constant, the A. Degree of operating leverage declines B. Margin of safety stays constant C. Breakeven point goes down D. Contribution margin ratio goes up

Q: ssume there is a reduction in the selling price and all other CVP parameters remain constant. This…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: Which of the following conditions would cause the break-even point to increase? Oa. total fixed…

A: The break even point the fixed cost of the production of the material is equal to the difference in…

Q: If only the selling price per unit of a product increases (variable cost per unit and total fixed…

A: CVP analysis, or cost-volume-profit analysis, is a management accounting technique used to analyze…

Q: Suppose that the elasticity of demand at a given price level is E(p)=.8. What does that mean? Select…

A: Answer -The company should lower the prices to raise revenues. Since 0<E(p)<1, demand is…

Q: The conventional CVP (Cost-volume and profit) analysis has some underlying assumptions regarding…

A: Cost volume profit analysis - This analysis shows how a change in variable cost and change in fixed…

Q: Which of the following statements is correct: A. total fixed cost remain constant while variable…

A: Fixed Costs: Total Fixed cost remains constant at all the level of activities. Fixed cost per unit…

Q: Which of the following statements about margin of safety is false? O a. If the variable cost per…

A: If Fixed cost decreases remaining constant Break even sales automatically Break even sales reduces…

Q: Fixed cost per unit of output decreases as volume increases. True or False True False

A: Any organization generally have two types of expenses - Fixed costs and variable costs. Fixed costs…

Q: At this price, we would say the demand is: O Elastic O Unitary O Inelastic Based on this, to…

A:

Q: As fixed operating costs increase and all other factors are held constant, ________.   the…

A: The Degree of Operating Leverage (DOL) is a multiple that makes measurement on the amount of…

Q: Assume that only the specified parameters (that is, variables) change in a sensitivity analysis. The…

A:

Q: If fixed costs are a __________ percentage of __________, operating leverage is __________.   A.…

A: Solution:- Operating leverage means the use of fixed operating cost in the business.

Q: A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution…

A: The objective of the question is to identify the correct option that can help a firm reduce its…

Q: Which of the following assumptions of the CVP graph is not true? Multiple Choice Costs are linear.…

A: CVP stands forc cost volume price it is a way to find out that how changes in variable and fixed…

Q: In general, a firm with low operating leverage also has a small proportion of its total costs in the…

A: The concept of operating leverage is vital in understanding the cost structure of a firm and its…

Q: Within the relevant range: Select one: O A. variable cost per unit decreases as production…

A: Within the relevant range: (B) Fixed cost increases as the production decreases. With fewer goods…

Q: A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution…

A: The objective of the question is to identify the correct option that can help a firm reduce its…

Q: The use of fixed costs to extract higher percentage changes in profits as sales activity changes…

A: SOLUTION- DEGREE OF OPERATING LEVERAGE CALCULATES THE PROPORTIONAL CHANGE IN OPERATING INCOME THAT…

Q: Degree of operating leverage (DOL) measures the sensitivity of OCF in response to changes of The…

A: We have formula,Degree of operating leverage(DOL) = % change in operating income/% change in sales

Q: If only the selling price per unit of a product increases (variable cost per unit and total fixed…

A: The break-even points indicate where the revenues are equal to costs. It means there is neither…