- Pors References Mailings Review View Developer Help 5 TRUE OR FALSE. Select True or False for each question. Record all answers in the table. ONLY THE TABLE WILL BE MARKED. Each True or False question is worth 1 mark 1. Contribution margin per unit stays the same regardless of changes to sales volume. 2. The break-even point in units can be obtained by dividing total fored expenses by the contribution margin ratio. 3. If fixed expenses increase by $10,000 per year, then the level of sales needed to break even will also increase by $10,000 4. The contribution margin income statement format is used by many businesses for external reporting purposes. 5. For a given level of sales, a low contribution margin ratio will produce less net income than a high contribution margin ratio. -TRUE 6. A company with a degree of operating leverage of 4 would expect net income to increase by 200% if sales increased from $100,000 to $150,000 7. Once the break-even point is reached, net income will increase by the unit contribution margin for each additional item. 7. Once the break-even point is reached, net income will increase by the unit contribution margin for each additional item. 8. The amount by which a company's sales can decline before losses are incurred is called the contribution margin. 9. If company A has a higher degree of operating leverage than company B, then company's B's profits are more sensitive to percentage changes in sales. 10. The excess of budgeted or actual dollar sales over the break-even dollar sales is called the contribution margin