QUESTION 11 If the contribution margin ratio is 45% for XYZ Company, what would

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QUESTION 11 If the contribution margin ratio is 45% for XYZ Company, what would be the impact on net operating income if the firm is able to increase sales by $25,000 and fixed costs of $3,000 remain unchanged? O $11,250 increase O $8.250 increase O $13.750 increase $25,000 increase QUESTION 12 All of the following statements are true except: To calculate the break-even point in units, the unit contribution margin is used, while the contribution margin ratio is used when calculating the break-even point in dolar sales The break-even point can be calculated in unit sales or dollar sales and is the point where the companys profit equals a zero. The following formula should be used to calculate the break-even point in dollar sales: s0- (Unit Contribution margin X Quantity) Fixed expenses. if total contribution margin in dollars is equal to the total dolar amount of fixed costs, then the firm has a profit of zero.

Explanation / Answer

Answer for 11)

My answer is option $11250 increase.It is because the fixed costs remain unchanged and hence it need not be deducted with increase in sales which means total contribution for this$25000 is $11250(i.e $25000×45%).

Answer for 12)

My answer is (c).The reason is the formula for break even point in dollar sales:Fixed costs/contribution margin ratio.

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