1.As activity increases, the fixed cost per unit increases, while the variable cost per unit remains constant.

True False

2.Risk refers to the possibility that sacrifices may exceed benefits.

True False

3.Operating leverage enables a company to convert small changes in fixed costs into dramatic changes in profitability.

True False

4.If a company decreases its fixed costs and increases its variable costs, it will lower both the level of risk and its potential for profits.

True False

5. If revenues are expected to decline, management should attempt to convert its fixed costs into variable costs.

True False