The difference between variable cost and fixed cost is that

the cost amount fluctuates differently based on how many units are sold.

The main consideration in constructing a pro forma income

statement is the costs specifically associated with units sold during the time

period.

In developing the pro forma income

statement, we follow four important steps: 

1) Compute other expenses.

2) Determine a production schedule.

3) Establish a sales projection.

4) Determine profit by completing the

pro forma income statement.

What is the correct order for these

four steps?

The key initial element in developing all pro forma

statements is

At the break-even point, a firm's profits are

An increase in sales and/or profits means there is also an

increase in cash on the balance sheet.

To determine the break-even point for a company, you divide

the contribution margin by the fixed costs.

A firm's break-even point will rise if

If sales units exceeds the break-even point in units, the

firm will experience

Operating leverage determines how income from operations is

to be divided between debt holders and stockholders.