Respond that the following statements are TRUE or FALSE:

1) Fixed costs divided by the contribution margin ratio equals the breakeven point in sales dollars.

2) The breakeven point is the point where the sales revenues are equal to the fixed costs.

3) The breakeven point is the point where the sales revenues are equal to the total variable costs plus the total fixed costs.

4) A CVP graph shows how changes in the level of sales will affect profits.

5) The fundamental assumption of cost-volume-profit (CVP) analysis is that in the long-run fixed costs become variable costs.

Answer rating: 100% (QA)

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