Which of the following statements is true? 1. For a capital intensive, automated company the break-even point will tend to be higher and the margin of safety will be lower than for a less capital intensive company with the same sales. II. The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the target profit by the contribution margin ratio. Multiple Choice O Only statement I is true. Only statement il is true. Both statements are true. Neither statement is true.
Which of the following statements is true? 1. For a capital intensive, automated company the break-even point will tend to be higher and the margin of safety will be lower than for a less capital intensive company with the same sales. II. The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the target profit by the contribution margin ratio. Multiple Choice O Only statement I is true. Only statement il is true. Both statements are true. Neither statement is true.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
94.
Subject : - Accounting
Transcribed Image Text:Which of the following statements is true?
1. For a capital intensive, automated company the break-even point will tend to be higher and the margin of safety will be
lower than for a less capital Intensive company with the same sales.
II. The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the
target profit by the contribution margin ratio.
Multiple Choice
O
O
Only statement I is true.
Only statement II is true.
Both statements are true.
Neither statement is true.
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