1-Total variable costs change in response to changes in the volume of production.

True.

False.

2-Fixed costs per unit increase as production levels decrease.

True.

False.

3-Contribution margin is equal to sales minus fixed costs.

True.

False.

4-If all other factors are constant, an increase in fixed costs will increase the breakeven point.

a) True.

b) False.

5-The addition of a specified target operating income to contribution margin analysis has the same effect on required sales in units as increasing fixed expenses.

True.

False.

6. Sales mix is the combination of products that make up total sales.

True

False

7-Which of the following is a fixed cost?

Sales commissions

Straight line depreciation

Direct materials

Unit of production deprecation

8-Jenny was reviewing the water bill for her doggy day spa and determined that her highest bill, $3,000, occurred in July when she washed 2,000 dogs and her lowest bill, $2,000, occurred in November when she washed 1,000 dogs. What was the fixed rate for Jenny's water bill?