6. If the contribution margin is not sufficient to cover fixed expenses: A. total profit equals total expenses. B. contribution margin is negative. C. a loss occurs. D. variable expenses equal contribution margin. 7. Which of the following is TRUE regarding the contribution margin ratio of a company that produces only a single product? A. As fixed expenses decrease, the contribution margin ratio increases. B. The contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit. C. The contribution margin ratio will decline as unit sales decline. D. The contribution margin ratio equals the selling price per unit less the variable expense ratio. 8. Break-even analysis assumes that: A. Total revenue is constant. B. Unit variable expense is constant. C. Unit fixed expense is constant. D. Selling prices must fall in order to generate more revenue. 9. A RM2.00 increase in a product's variable expense per unit accompanied by a RM2.00 increase in its selling price per unit will: A. decrease the degree of operating leverage. B. decrease the contribution margin. C. have no effect on the break-even volume. D. have no effect on the contribution margin ratio. 10. If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in: A. unit contribution margin. B. revenue. C. variable expense. D. net operating income. 11. Which of the following costs at a manufacturing company would be treated as a product cost under variable costing? A. direct material cost B. property taxes on the factory building C. sales manager's sal Page 3 / 9 D. sales commissions +