9. For CVP analysis, both variable and fixed costs are assumed to have a linear relationship within the relevant range of activity. A) True B) False 10. The high-low method is used in classifying a mixed cost into its variable and fixed elements. A) True B) False 11. The CVP income statement classifies costs as variable or fixed and computes a contribution margin A) True B) False ve 12. The margin of safety tells a company how far sales can drop before it will be operating at a loss. A) True B) False 13. Operating leverage refers to the extent to which a company's net income reacts to a given change in fixed costs. A) True B) False speced Useof Cut 14. Sales mix is a measure of the percentage increase in sales from period to period. A) True B) False 15. When a company is in its early stages of operation, its primary goal is to generate a target net income. A) True B) False 16. In making decisions, management ordinarily considers both financial and nonfinancial information A) True B) False