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As sales exceed thebreak-even point, a high contribution-margin percentage A. in

ID: 2433393 • Letter: A

Question

As sales exceed thebreak-even point, a high contribution-margin percentage

A.

increases profits faster thandoes a low contribution-margin percentage

B.

increases profits at the samerate as a low contribution-margin percentage

C.

decreases profits at the samerate as a low contribution-margin percentage

D.

increases profits slower thandoes a low contribution-margin percentage

An increase in totalvariable cost usually indicates ___________.

A.

the cost-driver activity levelis decreasing

B.

the cost-driver activity levelis increasing

C.

variable cost per unit isdecreasing

D.

variable cost per unit isincreasing

_____ are a qualitative factor of a make-or-buydecision.

A.

Variable manufacturingcosts

B.

Avoidable costs

C.

Long-term relationships withsuppliers

D.

Opportunity costs

_____ old equipment is relevant in a decision to replaceequipment.

A.

Cost of

B.

Book value of

C.

Accumulated depreciationof

D.

Future maintenance costsof

As sales exceed thebreak-even point, a high contribution-margin percentage

A.

increases profits faster thandoes a low contribution-margin percentage

B.

increases profits at the samerate as a low contribution-margin percentage

C.

decreases profits at the samerate as a low contribution-margin percentage

D.

increases profits slower thandoes a low contribution-margin percentage

Explanation / Answer

As sales exceed the break-even point, a high contribution-marginpercentage A.increases profits faster than does a lowcontribution-margin percentage An increase in total variable cost usually indicates___________. D.variable cost per unit is increasing _____ are a qualitative factor of a make-or-buy decision. C. Long-term relationships with suppliers _____ old equipment is relevant in a decision to replaceequipment. D.Future maintenance costs of