17. If the amount of sales remains constant, the contribution margin ratio always decreases when:
A) The variable expense ratio increases
B) The variable expense ratio decreases
C) Fixed expenses increase
D) Fixed expenses decrease
18. The following information was taken from the accounting records of Theta Inc:
Sales revenue $20,000
Variable manufacturing expenses $5,000
Variable selling expenses $2,500
Fixed manufacturing expenses $1,500
Fixed selling expenses $500
Based on the above information, Theta's contribution margin ratio is:
A) 62.5%
B) 75%
C) 52.5%
D) 37.5%
19. Which of the following would not affect a company's break-even point?
A) number of units sold
B) variable expenses per unit
C) total fixed expenses
D) selling price
20. Which of the following statements is true?
A) Product costs affect only the balance sheet.
B) Product costs affect only the income statement.
C) Period costs affect only the balance sheet.
D) Product costs eventually affect both the balance sheet and the income statement.
