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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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
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