Chapter 6 sharpen

Question 1

The Fresh Baked Bread Company wants to reduce its break-even point (the number of sales needed to break even). This may be done by ______.

Decreasing its fixed expenses
Increasing its fixed expenses
Decreasing its contribution margin per unit
Increasing its variable expenses

Answer 1

Decreasing its fixed expenses W

Question 2

What’s the smallest possible degree of operating leverage for a company making a profit?

2.0
1.0
0.5
0.1

Answer 2

1.0