The break-even point would be increased by:

Select one:

a. an increase in total fixed costs.

b. a decrease in total fixed expenses.

c. a decrease in the ratio of variable expenses to sales.

d. an increase in the contribution margin ratio.

In order to properly report segment margin as a guide to long-run segment profitability and performance, fixed costs must be separated into two broad categories. One category is common fixed costs. What is the other category?

Select one:

a. discretionary fixed costs

b. committed fixed costs

c. specialized fixed costs

d. traceable fixed costs

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

Select one:

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

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

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

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

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

Select one:

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

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

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

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

Nidal Corporation has just segmented last year's income statement into its ten product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole?

Select one:

a. the product line's contribution margin

b. the product line's segment margin minus an allocated portion of common fixed expenses

c. the product line's segment margin

d. the product line's sales dollars