Question 1

a.) Is it logical to conclude that total direct material costs would remain constant regardless of production volume. (True/False)

b.) Is it logical to conclude that fixed costs per unit will increase as production volume rises. (True/False)

c.) Cost-Volume-Profit analysis (CVP) can be used to calculate sales revenue needed to either break even or earn a profit. (True/False)

d.) Given variable costs of $12 per unit and a contribution margin of $8 per unit, profit would be $20 per unit. (True/False)

e.) After studying chapter 21, it's safe to assume that total fixed costs can change. (True/False)

f.) After studying chapter 21, it's safe to conclude that pharmacutical companies, for example, will only develop new drugs that CVP analysis shows will be profitable. (True/False)

g.) In the airline industry, break-even occurs when RASM and CASM are equal. (True/False)