83. As activity increases, the fixed cost per unit increases while the variable cost per unit remains constant. True False 84. Risk refers to the possibility that sacrifices may exceed benefits. True False 85. Operating leverage enables a company to convert small changes in fixed costs into dramatic changes in profitability. True False 86. If a company shifts its cost structure by decreasing fixed costs and increasing variable costs, it will lower both the level of risk and its potential for profits. True False 87. If revenues are expected to decline, management should attempt to convert its variable costs into fixed costs. True False 88. Companies with low operating leverage will experience lower profits when sales increase than will companies with higher operating leverage. True False 89. A company with a completely fixed cost structure will have operating leverage of 1. True False 90. Contribution margin represents the amount available to fixed expenses and then provide company profits. True False 91. No contribution margin is provided by selling one unit of a product at a price of $35 if variable production costs are $20, variable general and administrative costs are $5, and fixed costs are $10 per unit. True False 92. The contribution margin format income statement is not widely used for external financial reporting, but is allowed by GAAP. True False
83. As activity increases, the fixed cost per unit increases while the variable cost per unit remains constant. True False 84. Risk refers to the possibility that sacrifices may exceed benefits. True False 85. Operating leverage enables a company to convert small changes in fixed costs into dramatic changes in profitability. True False 86. If a company shifts its cost structure by decreasing fixed costs and increasing variable costs, it will lower both the level of risk and its potential for profits. True False 87. If revenues are expected to decline, management should attempt to convert its variable costs into fixed costs. True False 88. Companies with low operating leverage will experience lower profits when sales increase than will companies with higher operating leverage. True False 89. A company with a completely fixed cost structure will have operating leverage of 1. True False 90. Contribution margin represents the amount available to fixed expenses and then provide company profits. True False 91. No contribution margin is provided by selling one unit of a product at a price of $35 if variable production costs are $20, variable general and administrative costs are $5, and fixed costs are $10 per unit. True False 92. The contribution margin format income statement is not widely used for external financial reporting, but is allowed by GAAP. True False