1. Multiple Choice Questions: 12 marks (i) If calculations show that the break-even point is too high (i.e., the operating risk is high) for the firm, which of the following action is not helpful to reduce the break-even point? a. Consider decreasing the total fixed costs. b. Consider reducing the variable cost per unit. C. Consider reducing the selling prices per unit. d. Consider decreasing advertising costs. The contribution margin ratio a. is used when the number of units are not available. b. measures the contribution margin divided by total costs. c. measures the contribution margin divided by fixed cost. d. measures the contribution margin divided by variable cost. (iii) Cost-volume-profit analysis can be used for all of the following planning issues, except: a. setting sales price per unit. b. measuring firms' level of operating risk. C. determining a cost structure of the firm. d. predicting a business' financial position. (iv) Which of the following statements regarding the participative style of budgeting is NOT true? a. Department managers do not control the targets and budgets. b. The targets and budgets are prepared after negotiations between senior management and department managers. c. Provides department managers with an opportunity to create some 'room to move'. d. Department managers feel 'ownership of the target. (v) Which of the followings describes a way in which budgeting can assist in decision making? a. Identifying expected cash shortages. b. Determining inventory levels. C. Setting production targets for managers. d. All of the other options. (vi) Budgetary slack is one common behavioural issue related to budgeting. Which of the followings is an example of budgetary slack? a. Budgeted expenses are overstated and budgeted revenues are understated. b. Actual expenses are overstated and actual revenues are understated. c. Budgeted expenses are understated and budgeted revenues are overstated. d. Budgeted expenses are overstated and actual revenues are overstated