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Problem 1: The equation which reflects a CVP income statement is
a. Sales + Fixed costs = Variable costs + Net income.
b. Sales - Variable costs + Fixed costs = Net income.
c. Sales - Variable costs - Fixed costs = Net income.
d. Sales = Cost of goods sold + Operating expenses + Net income.
Problem 2: An increase in the level of activity will have the following effects on unit costs for variable and fixed costs:
a. Unit Variable Cost Unit Fixed CostDecreases Remains constant
b. Unit Variable Cost Unit Fixed Cost Remains constant Remains constant
c. Unit Variable Cost Unit Fixed Cost Remains constant Decreases
d. Unit Variable Cost Unit Fixed Cost Increases Decreases
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