49. The contribution margin per unit and the contribution margin ratio will remain constant as long as:

a. the selling cost remains the same.

b. the cost of production and selling price changes.

c. the sales revenue varies in direct proportion to volume.

d. the volume of sales decreases.

50. The difference between sales and cost of goods sold equals ________.

a. net profit

b. profit after tax

c. gross profit

d. operating profit

51. Which of the following will increase the contribution margin?

a. Reduction in fixed costs

b. Reduction in net income

c. Reduction in sales

d. Reduction in variable costs

52. Which of the following would decrease variable costs?

a. Reduction in wages paid as direct labor

b. Reduction in salaries of administrative department

c. Reduction in research expenditure

d. Reduction in rent expense

53. With reference to costvolumeprofit analysis, identify the correct statement.

a. Sales + Variable cost + Fixed cost = Net operating income

b. Sales + Variable cost = Fixed cost Net operating income

c. Sales Variable cost + Fixed cost = Net operating income

d. Sales Variable cost Net operating income = Fixed cost

54. The breakeven point is the level of sales at which the contribution margin covers ________.

a. net income before tax

b. variable costs

c. net income after tax

d. fixed costs

55. Which of the following is correct regarding the implication of taxes on profits?

a. Aftertax profit = Beforetax profit (tax rate 1)

b. Beforetax profit = After tax profit (1 tax rate)

c. Beforetax profit = Aftertax profit (tax rate 1)