Question 1

An example of a service business's unit of sale would be one ________ of service.

Accepted Answer

A)  Dozen 
B)  Hour 
C)  Crate 
D)  Gross 
A)  Dozen 
B)  Hour 
C)  Crate 
D)  Gross B

Question 2

Which two categories below are used for business costs?

Accepted Answer

A)  Gross and net 
B)  Fixed and variable 
C)  Materials and labor 
D)  Pre-tax and after-tax 
A)  Gross and net 
B)  Fixed and variable 
C)  Materials and labor 
D)  Pre-tax and after-tax B

Question 3

Maintaining a cash reserve at start-up is considered to be a poor management practice.

Accepted Answer

A) True 
 B)False  False

Question 4

If you sell $2,500 worth of product, pay COGS of $800 and other variable costs of $360, what is your gross profit?

Accepted Answer

A)  $2,464 
B)  $1,700 
C)  $1,340 
D)  $2,140 
A)  $2,464 
B)  $1,700 
C)  $1,340 
D)  $2,140

Question 5

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 6

If a business has total gross profit of $14,720 and total operating costs of $11,500, what is its total profit?

Accepted Answer

A)  $3,220 
B)  $3,000 
C)  $1,150 
D)  $26,220 
A)  $3,220 
B)  $3,000 
C)  $1,150 
D)  $26,220

Question 7

Which of the following would be a start-up cost for an internet business?

Accepted Answer

A)  Computers 
B)  A URL 
C)  Licenses 
D)  All of the above 
A)  Computers 
B)  A URL 
C)  Licenses 
D)  All of the above

Question 8

If a business sells 5,000 units for a total profit of $200,000, what is its profit per unit?

Accepted Answer

A)  $400 
B)  $50 
C)  $40 
D)  None of the above 
A)  $400 
B)  $50 
C)  $40 
D)  None of the above

Question 9

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 10

Seed capital is the start- up investment or one-time expense of opening a business.

Accepted Answer

A) True 
 B)False

Question 11

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 12

A litmus test for profitability is the ________.

Accepted Answer

A)  Economics of one unit (EOU) 
B)  The money borrowed (IOU) 
C)  A focus on quality 
D)  Optional features 
A)  Economics of one unit (EOU) 
B)  The money borrowed (IOU) 
C)  A focus on quality 
D)  Optional features

Question 13

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 14

The current value of a proposed investment may be calculated as its ________.

Accepted Answer

A)  Internal rate of return (IRR) 
B)  Present value (PV) 
C)  Net present value (NPV) 
D)  Return on investment (ROI) 
A)  Internal rate of return (IRR) 
B)  Present value (PV) 
C)  Net present value (NPV) 
D)  Return on investment (ROI)

Question 15

A prototype ________.

Accepted Answer

A)  Is a model or pattern 
B)  Serves as an example of how a product would look if it were produced 
C)  Serves as an example of how a product would operate if it were produced 
D)  All of the above 
A)  Is a model or pattern 
B)  Serves as an example of how a product would look if it were produced 
C)  Serves as an example of how a product would operate if it were produced 
D)  All of the above

Question 16

Total Revenue - ________ = Total Gross Profit

Accepted Answer

A)  Total operating costs 
B)  Total units sold 
C)  Total cost of goods sold 
D)  Total materials cost 
A)  Total operating costs 
B)  Total units sold 
C)  Total cost of goods sold 
D)  Total materials cost

Question 17

Give three reasons to keep good records every day

Accepted Answer

Keeping good records will show you how t

Question 18

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 19

Inflation has no effect on small business.

Accepted Answer

A) True 
 B)False

Question 20

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

An example of a service business's unit of sale would be one ________ of service.

Which two categories below are used for business costs?

Maintaining a cash reserve at start-up is considered to be a poor management practice.

If you sell $2,500 worth of product, pay COGS of $800 and other variable costs of $360, what is your gross profit?

If a business has total gross profit of $14,720 and total operating costs of $11,500, what is its total profit?

Which of the following would be a start-up cost for an internet business?

If a business sells 5,000 units for a total profit of $200,000, what is its profit per unit?

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

Seed capital is the start- up investment or one-time expense of opening a business.

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

A litmus test for profitability is the ________.

There are two categories of variable costs: ________.

The current value of a proposed investment may be calculated as its ________.

A prototype ________.

Total Revenue - ________ = Total Gross Profit

Give three reasons to keep good records every day

Inflation has no effect on small business.

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

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

An example of a service business's unit of sale would be one ________ of service.

Which two categories below are used for business costs?

Maintaining a cash reserve at start-up is considered to be a poor management practice.

If you sell $2,500 worth of product, pay COGS of $800 and other variable costs of $360, what is your gross profit?

If a business has total gross profit of $14,720 and total operating costs of $11,500, what is its total profit?

Which of the following would be a start-up cost for an internet business?

If a business sells 5,000 units for a total profit of $200,000, what is its profit per unit?

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

Seed capital is the start- up investment or one-time expense of opening a business.

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

A litmus test for profitability is the ________.

There are two categories of variable costs: ________.

The current value of a proposed investment may be calculated as its ________.

A prototype ________.

Total Revenue - ________ = Total Gross Profit

Give three reasons to keep good records every day

Inflation has no effect on small business.

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

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