Question 1. The level of sales at which revenues equal expenses and net income is zero is called the:
a) margin of safety
b) contribution margin
c) break-even point
d) marginal income point
Question 2. The ________ is the change in total results under a new condition, in comparison with some given or known condition.
a) incremental effect
b) detrimental effect
c) conditional effect
d) comparability effect
Question 3. Ankeny Company wishes to earn after-tax net income of $18,000. Total fixed costs are $84,000, and the contribution margin per unit is $6.00. Ankeny's tax rate is 40%. The number of units that must be sold to earn the targeted net income is:
a)14,000 units
b)17,000 units
c)19,000 units
d)21,500 units
Question 4. As the level of activity decreases within the relevant range:
a)total fixed costs increase
b)fixed costs per unit decreases
c)total variable costs increase
d)variable costs per unit remain unchanged