Match each item with the correct statement below.
-The point where total sales revenue equals total cost.
A)break-even point
B)Common fixed expenses
C)Contribution margin
D)Direct fixed expenses
E)Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix

Question

Quizplus · Accepted Answer

The break-even point is the point where total sales revenue equals total cost.

Answer: D
 Direct fixed expenses are expenses that do not vary with changes in the level of sales.

Answer: C
 Contribution margin is the amount by which sales revenue exceeds variable costs.

Answer: B
 Common fixed expenses are expenses that cannot be directly traced to a product or service.

Answer: E
 Margin of safety is the amount by which sales can drop before the company incurs a loss.

Answer: F
 Operating leverage is the degree to which a company uses fixed costs in its operations.

Answer: G
 The degree of operating leverage measures the percentage change in net income resulting from a given percentage change in sales.

Answer: H
 Sales mix is the proportion in which a company's products or services are sold.

Match Each Item with the Correct Statement Below