2. Question 3

   1 Point

   If a company is operating at the break-even point:

   1. its margin of safety will be equal to zero.

   2. its fixed expenses will be equal to its variable expenses.

   3. its selling price will be equal to its variable expense per unit.

   4. its contribution margin will be equal to its variable expenses.

3. Question 4

   1 Point

   Which of the following would not affect the break-even point?

   1. selling price per unit

   2. number of units sold

   3. total fixed expense

   4. variable expense per unit

4. Question 5

   1 Point

   Target profit analysis is used to answer which of the following questions?

   1. What sales volume is needed to earn a specific amount of net operating income?

   2. What sales volume is needed to cover all expenses?

   3. What sales volume is needed to avoid a loss?

   4. What sales volume is needed to cover fixed expenses?

5. Question 6

   1 Point

   At the break-even point:

   1. contribution margin would be equal to net operating income.

   2. sales would be equal to fixed expenses.

   3. sales would be equal to contribution margin.

   4. contribution margin would be equal to fixed expenses.

6. Question 7

   1 Point

   Which of the following is true regarding the contribution margin ratio of a single product company?

   1. As fixed expenses decrease, the contribution margin ratio increases.

   2. The contribution margin ratio equals the selling price per unit less the variable expense ratio.

   3. The contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit.

   4. The contribution margin ratio will decline as unit sales decline.