QUESTION 7 Which of the following statements is correct with regard to a CVP (Cost, Volume,…
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Question “QUESTION 7 Which of the following statements is correct with regard to a CVP (Cost, Volume,…”
QUESTION 7 Which of the following statements is correct with regard to a CVP (Cost, Volume, Profit) graph? 1.A CVP graph shows the maximum possible profit. 2.A CVP graph shows the break-even point as the intersection of the total sales revenue line and the total expense line 3.A CVP graph assumes that total expense varies in direct proportion to unit sales. 4.A CVP graph shows the operating leverage as the gap between total sales revenue and total expense at the actual level of sales QUESTION 8 If a company is operating at the break-even point O 2. its margin of safety will be equal to zero. O 4. its selling price will be equal to its variable expense per unit. 1.its contribution margin will be equal toisiable expenses. 3. its fixed expenses will be equal to its variable expenses. QUESTION 9 Drake Company’s income statement for the most recent year appears below: $650,000 442,000 208,000 234,000 $(26.000) Contribution margin Net operating loss…. Drake’ break-even point in units is: 1.26,000 2.29,250 3.55,250 O 4.none of the above
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