q1 a. Other things being equal, the higher the degree of operating leverage, the _________ profit opportunity with increased sales and __________ risk of loss with a decrease in sales.

1. Lower; higher
2. Higher; lower
3. Lower; lower
4. Higher; higher

b. Which of the following is NOT a cost estimation method?

A) High-low cost estimation

B) Scatter diagrams

C) Least-square regressions

D) CVP analysis

c. The total monthly operating costs of Coffee To Go are: $20,000 + $0.25X

where X = Number of coffee

Determine the monthly volume at which the average cost per cup is $0.75.

1. 25,000 cups
2. 15,000 cups
3. 45,000 cups
4. 40,000 cups