Question 1

Paying cash for business purchases is highly recommended over paying via check or electronic transfer.

Accepted Answer

A) True 
 B)False  False

Question 2

Fixed Operating Costs ________.

Accepted Answer

A) Are not included in COGS 
B) Include expenses like the DSL bill and rent 
C) Are not direct costs of creating each product 
D) All of the above. 
A) Are not included in COGS 
B) Include expenses like the DSL bill and rent 
C) Are not direct costs of creating each product 
D) All of the above. D

Question 3

If you sell $2,500 of product,pay COGS of $800 and other variable costs of $450,what is your contribution margin in percentage form?

Accepted Answer

A) 25.5% 
B) 50.0% 
C) 20.3% 
D) 33.3% 
A) 25.5% 
B) 50.0% 
C) 20.3% 
D) 33.3% B

Question 4

Net profit is calculated before taxes are taken into consideration.

Accepted Answer

A) True 
 B)False

Question 5

Start-up investment is the one-time expense of opening a business.It is also called ________.

Accepted Answer

A) Down payment 
B) Seed capital 
C) Entry cost 
D) Initial deposits 
A) Down payment 
B) Seed capital 
C) Entry cost 
D) Initial deposits

Question 6

Carla sells hot coffee,cider and tea from a sidewalk cart near Wall Street in New York City.Last month she sold $4,500 worth of product to 1,000 customers.She spent $800 on buying her beverages in bulk.Her monthly costs are: Utilities = $100,Salary = $2,000,Advertising = $0,Insurance = $0,Interest = $0,Rent (cart)= $600,Depreciation = $0.Calculate Carla's average sale per customer.

Accepted Answer

A) $5.00 
B) $4.00 
C) $4.50 
D) $4.67 
A) $5.00 
B) $4.00 
C) $4.50 
D) $4.67

Question 7

If you sell $2,500 of product,pay COGS of $800 and other variable costs of $450,what is your contribution margin in dollars?

Accepted Answer

A) $1,700 
B) $2,050 
C) $1,250 
D) $2,450 
A) $1,700 
B) $2,050 
C) $1,250 
D) $2,450

Question 8

What is the estimated time required to earn sufficient net cash flow to cover the start-up investment?

Accepted Answer

A) Repayment estimate 
B) Payback period 
C) Net cash flow period 
D) Recovery period 
A) Repayment estimate 
B) Payback period 
C) Net cash flow period 
D) Recovery period

Question 9

A cash reserve is also known as a(n)________.

Accepted Answer

A) Emergency fund 
B) Pool of cash resources 
C) Contingency fund 
D) All of the above 
A) Emergency fund 
B) Pool of cash resources 
C) Contingency fund 
D) All of the above

Question 10

Overhead is another term for ________.

Accepted Answer

A) Seed capital 
B) Net costs 
C) Fixed operating costs 
D) Management 
A) Seed capital 
B) Net costs 
C) Fixed operating costs 
D) Management

Question 11

Carla sells hot coffee,cider and tea from a sidewalk cart near Wall Street in New York City.Last month she sold $4,500 worth of product to 1,000 customers.She spent $800 on buying her beverages in bulk.Her monthly costs are: Utilities = $100,Salary = $2,000,Advertising = $0,Insurance = $0,Interest = $0,Rent (cart)= $600,Depreciation = $0.What are Carla's fixed costs?

Accepted Answer

A) $3,000 
B) $2,700 
C) $2,000 
D) $3,500 
A) $3,000 
B) $2,700 
C) $2,000 
D) $3,500

Question 12

Leasehold improvements are a start-up expense.

Accepted Answer

A) True 
 B)False

Question 13

A suggested allowance for contingencies and emergencies at start-up is ________ percent of estimated start-up costs,although more is better.

Accepted Answer

A) 5 
B) 10 
C) 25 
D) 40 
A) 5 
B) 10 
C) 25 
D) 40

Question 14

Fernando plans to sell hot coffee,cider and tea from a sidewalk cart near Wall Street in New York City.Each month he expects to sell $20,000 of product to 4,000 customers.He spent $4,000 on buying his beverage and supplies in bulk for the first month.The rental deposit on the cart was $4,000 and Fernando spent $500 to customize it.He bought a laptop,printer and software for $1,000 and paid a total of $1,000 for licenses.He has $500 in petty case for start up.His monthly costs are: Utilities = $500,Salary = $4,000,Advertising = $0,Insurance = $500,Interest = $0,Rent (cart)= $2,000,Depreciation = $0.Calculate Fernando's start-up costs without a reserve.

Accepted Answer

A) $18,000 
B) $14,000 
C) $12,500 
D) $11,000 
A) $18,000 
B) $14,000 
C) $12,500 
D) $11,000

Question 15

Give three reasons to keep good records every day

Accepted Answer

Keeping good records will show you how t

Question 16

Carla sells hot coffee,cider and tea from a sidewalk cart near Wall Street in New York City.Last month she sold $4,500 worth of product to 1,000 customers.She spent $800 on buying her beverages in bulk.Her monthly costs are: Utilities = $100,Salary = $2,000,Advertising = $0,Insurance = $0,Interest = $0,Rent (cart)= $600,Depreciation = $0.What is Carla's monthly cost of goods sold?

Accepted Answer

A) $800 
B) $100 
C) $450 
D) $1,500 
A) $800 
B) $100 
C) $450 
D) $1,500

Question 17

Which of the following is not a category of fixed costs?

Accepted Answer

A) Depreciation 
B) Utilities 
C) Capital 
D) Raw materials 
A) Depreciation 
B) Utilities 
C) Capital 
D) Raw materials

Question 18

________ will tell you how long it will take you to earn enough profit to cover your start-up investment.

Accepted Answer

A) Payback 
B) ROI 
C) Return on sales 
D) Return on assets 
A) Payback 
B) ROI 
C) Return on sales 
D) Return on assets

Question 19

There are two categories of variable costs: ________.

Accepted Answer

A) Gross costs and net variable costs 
B) Net variable costs and cost of goods sold 
C) Cost of goods sold and other variable costs 
D) Gross variable costs and net costs 
A) Gross costs and net variable costs 
B) Net variable costs and cost of goods sold 
C) Cost of goods sold and other variable costs 
D) Gross variable costs and net costs

Question 20

Fixed operating costs can change over time.

Accepted Answer

A) True 
 B)False

Paying cash for business purchases is highly recommended over paying via check or electronic transfer.

Fixed Operating Costs ________.

If you sell $2,500 of product,pay COGS of $800 and other variable costs of $450,what is your contribution margin in percentage form?

Net profit is calculated before taxes are taken into consideration.

Start-up investment is the one-time expense of opening a business.It is also called ________.

If you sell $2,500 of product,pay COGS of $800 and other variable costs of $450,what is your contribution margin in dollars?

What is the estimated time required to earn sufficient net cash flow to cover the start-up investment?

A cash reserve is also known as a(n)________.

Overhead is another term for ________.

Leasehold improvements are a start-up expense.

A suggested allowance for contingencies and emergencies at start-up is ________ percent of estimated start-up costs,although more is better.

Give three reasons to keep good records every day

Which of the following is not a category of fixed costs?

________ will tell you how long it will take you to earn enough profit to cover your start-up investment.

There are two categories of variable costs: ________.

Fixed operating costs can change over time.

Entrepreneurs Recognize Opportunities

Franchising

Finding Opportunity in an Existing Business

The Business Plan: Road Map to Success

Creating Business From Opportunity

Exploring Your Market

Developing the Right Marketing Mix and Plan

Pricing and Credit Strategies

Integrated Marketing Communications

Marketing Globally

Smart Selling and Effective Customer Service

Using Financial Statements to Guide a Business

Cash Flow and Taxes

Financing Strategy: Debt, equity, or Both

Addressing Legal Issues and Managing Risk

Operating for Success

Location, facilities, and Layout

Human Resources and Management

Leadership and Ethical Practices

Franchising, licensing, and Harvesting: Cashing in Your Brand

Filters

Exam 12: Understanding and Managing Start-Up, fixed, and Variable Costs

Paying cash for business purchases is highly recommended over paying via check or electronic transfer.

Fixed Operating Costs ________.

If you sell $2,500 of product,pay COGS of $800 and other variable costs of $450,what is your contribution margin in percentage form?

Net profit is calculated before taxes are taken into consideration.

Start-up investment is the one-time expense of opening a business.It is also called ________.

If you sell $2,500 of product,pay COGS of $800 and other variable costs of $450,what is your contribution margin in dollars?

What is the estimated time required to earn sufficient net cash flow to cover the start-up investment?

A cash reserve is also known as a(n)________.

Overhead is another term for ________.

Leasehold improvements are a start-up expense.

A suggested allowance for contingencies and emergencies at start-up is ________ percent of estimated start-up costs,although more is better.

Give three reasons to keep good records every day

Which of the following is not a category of fixed costs?

________ will tell you how long it will take you to earn enough profit to cover your start-up investment.

There are two categories of variable costs: ________.

Fixed operating costs can change over time.

Entrepreneurs Recognize Opportunities

Franchising

Finding Opportunity in an Existing Business

The Business Plan: Road Map to Success

Creating Business From Opportunity

Exploring Your Market

Developing the Right Marketing Mix and Plan

Pricing and Credit Strategies

Integrated Marketing Communications

Marketing Globally

Smart Selling and Effective Customer Service

Using Financial Statements to Guide a Business

Cash Flow and Taxes

Financing Strategy: Debt, equity, or Both

Addressing Legal Issues and Managing Risk

Operating for Success

Location, facilities, and Layout

Human Resources and Management

Leadership and Ethical Practices

Franchising, licensing, and Harvesting: Cashing in Your Brand

Filters