19. Operating leverage measures: A. How sensitive profit is to a change in total fixed costs. B. How sensitive profit is to a change in sales (volume). C. How sensitive profit is to a change in sales price per unit. D. How sensitive profit is to a change in variable cost per unit. 20. Which of the following statements is TRUE regarding the financial accounting income statement? a. Sales revenue is based on the units produced rather than the units sold. b. It will include a subtotal called contribution margin. c. It will group costs into categories based on their behavior (fixed versus variable). d. It is required for external reporting purposes. 21. Which of the following statements is FALSE regarding the management accounting (contribution margin) income statement? a. It will group costs into categories based on their behavior (fixed versus variable). b. It will include a subtotal called gross proft. c. It is not allowed for external reporting purposes. d. It is used by management to perform cost-volume-profit analysis. 22. Assuming a company has net income, which of the following statements is TRUE regarding the contribution margin per unit? a. It will decrease as the number of units sold increases. b. It will decrease as the number of units sold decreases. c. It indicates the amount that net income will increase with the sale of each additional unit. d. It indicates the amount that variable costs will decrease with the sale of each additional unit. 23. Which of the following statements is TRUE when making decisions using cost-volume-profit (CVP) analysis? a. As long as the total contribution margin is a positive number, net income will be positive. b. As long as the total variable costs are more than the total fixed costs, net income will be negative. c. As long as the total contribution margin is greater than the total fixed costs, net income will be positive. d. As long as the sales price per unit is greater than the fixed costs per unit, net income will be positive