true or false The smaller the contribution margin ratio, the larger the amount of sales required to cover a given amount of fixed expenses  True  False   The margin of safety can be defined as the amount by which profit can decrease before losses are incurred by the company  True  False   A big increase in sales will result in a small increase in profit if there is a low degree of operating leverage in a company  True  False

Q: A positive price-to-book ratio indicates something is wrong with a company's use of its assets. True…

A: In the world of finance and investing, numerous metrics and ratios are utilized to evaluate the…

Q: Why would a company want to know their operating leverage when they can already calculate the number…

A: Degree of operating leverage means the division of contribution with operating income. Number of…

Q: The degree of operating leverage is equal to Group of answer choices only important…

A: Degree of operating leverage helps to identify change in operating income of a company in response…

Q: Which of the following statements about operating leverage is false? O a. If the degree of operating…

A: Answer

Q: Maximizing profits means to ______. a. create a balance between seeking economic profits and seeking…

A: Answer Option C is correct - Increase the difference between what is given up for input and what is…

Q: If a company had a pure fixed cost structure, every dollar of revenue after covering the fixed costs…

A: Step 1 In the pure fixed cost structure, the variable cost does not exist; only fixed cost hit the…

Q: Discuss the problems a company may have by looking at short term profit as a measure of performance

A: A measure of performance refers to a indicator used to assess how effectively and efficiently an…

Q: When sales volume increases, which company will experience a larger percentage increase in profit:…

A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining that how any…

Q: s total fixed expenses b. increasing the selling price per unit      c.

A: Breakeven point is the point at which the fixed cost equals contribution margin. Contribution margin…

Q: Explain why a segment with an operating loss can cause the company to have a decrease in total…

A: Introduction A segment is eliminated based on the comparison of total cost incurred by that segment…

Q: The break-even point is the sales level at which a company neither earns a profit nor incurs a loss…

A: The break even sales units are calculated as fixed cost divided by contribution margin per unit.

Q: The operating break-even sales level is not sensitive to which of the following variables? fixed…

A: Operating break even sales level-It is a point at which a company's total revenue equals its total…

Q: The trend for cost of goods sold is it is decreasing as a percentage of sales and the trend for…

A: CVP analysis is used to analyze the impact of changes in sales volume on costs and operational…

Q: Would an increase in variable costs per unit cause a company’s break-even point to increase or…

A: The Breakeven point is that level of sales at which Contribution is equal to Fixed cost. In orher…

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 statements is true? A In linear break-even analysis, the contribution margin…

A: As per the linear break-even model, the contribution margin per unit is the difference between the…

Q: If a company has excess capacity, it is contemplating whether a special order should be accepted.…

A: Special order means the new order which the entity can produce within the available production…

Q: If sales volume decreases and all other factors remain constant, then the Multiple Choice   margin…

A: Margin of safety = Sales - Break-even sales Break-even point = Fixed cost / Contribution margin…

Q: pany that is seeking to increase return on investment should attempt to decrease: 1. sales…

A: ROI: It basically means the average return on an investment in a particular period in which the…

Q: For an enterprise, when at least one input is held constant while other inputs are increased, there…

A: The question is based on concept to establish relationship between input and change in input with…

Q: A high operating margin implies that ______________ . The company is in a better position to…

A: Operating margin means proportion of operating income over sales

Q: When sales volume is rising do companies with a larger percentage of variable expenses or companies…

A: Hence companies with a larger percentage of variable expenses provide a larger percentage increase…

Q: Suppose sales volume increase by the same percentage for Company X and Company Y.  Use CVP analysis…

A: Cost volume profit (CVP) analysis is the one which is helpful in analyzing the costs and profits of…

Q: If company A has a higher degree of operating leverage than company B, then which of the following…

A: Variable expenses are those costs that occur in proportionate to the units produced or revenue…

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: 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: Consider the following​ statements:      1. Businesses that are capital intensive tend to have high…

A: Lets understand the meaning of operating gearing. Operating gearing reflect the relation ship…

Q: How does good operating leverage magnify earnings results with modest revenue increase?

A: Operating Leverage: A cost-accounting technique called operational leverage assesses how much a…