Question 1

The bedrock principle of business is that it should ________.

Accepted Answer

A)  please its customers 
B)  advertise better than its competitors 
C)  earn a profit 
D)  continually improve 
A)  please its customers 
B)  advertise better than its competitors 
C)  earn a profit 
D)  continually improve

Question 2

You should keep reserves of at least ________.

Accepted Answer

A)  3 months of fixed operating costs 
B)  6 months of fixed operating costs 
C)  one half of the start-up investment 
D)  one year of fixed operating costs 
A)  3 months of fixed operating costs 
B)  6 months of fixed operating costs 
C)  one half of the start-up investment 
D)  one year of fixed operating costs

Question 3

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)  $4.50 
B)  $4.00 
C)  $5.00 
D)  $0.80 
A)  $4.50 
B)  $4.00 
C)  $5.00 
D)  $0.80

Question 4

Which two categories below are used for business costs?

Accepted Answer

A)  materials and labor 
B)  gross and net 
C)  fixed and variable 
D)  cost of goods sold and administrative 
A)  materials and labor 
B)  gross and net 
C)  fixed and variable 
D)  cost of goods sold and administrative

Question 5

Jenny is worried because when she calculates the EOU for her business, the gross profit is too low. Explain whether or not she could improve it by finding an office with a lower monthly rent.

Accepted Answer

Gross profit is calculated by subtractin

Question 6

Variable costs are expenses that must be paid regardless of whether sales are being generated.

Accepted Answer

A) True 
 B)False

Question 7

Depreciation is a(n) ________.

Accepted Answer

A)  fixed operating cost 
B)  variable cost 
C)  flexible cost 
D)  administrative cost 
A)  fixed operating cost 
B)  variable cost 
C)  flexible cost 
D)  administrative cost

Question 8

Total Revenue divided by ________ = units sold.

Accepted Answer

A)  selling price 
B)  profit 
C)  total operating costs 
D)  cost 
A)  selling price 
B)  profit 
C)  total operating costs 
D)  cost

Question 9

Business start-up cost information can be obtained from ________.

Accepted Answer

A)  advisors 
B)  quotations from vendors 
C)  industry data 
D)  All of the above. 
A)  advisors 
B)  quotations from vendors 
C)  industry data 
D)  All of the above.

Question 10

The difference between a receipt and an invoice is that the receipt records ________.

Accepted Answer

A)  sales 
B)  interest paid 
C)  purchases 
D)  credit transactions 
A)  sales 
B)  interest paid 
C)  purchases 
D)  credit transactions

Question 11

The Thomas Register of American Manufacturers lists companies that specialize in creating ________.

Accepted Answer

A)  products 
B)  prototypes 
C)  copyrights 
D)  services 
A)  products 
B)  prototypes 
C)  copyrights 
D)  services

Question 12

The systematic recording, reporting, and analysis of the financial transactions of a business is called ________.

Accepted Answer

A)  accounting 
B)  reconciliation 
C)  cost analysis 
D)  cash flow analysis 
A)  accounting 
B)  reconciliation 
C)  cost analysis 
D)  cash flow analysis

Question 13

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

Accepted Answer

A)  rent 
B)  advertising 
C)  capital 
D)  depreciation 
A)  rent 
B)  advertising 
C)  capital 
D)  depreciation

Question 14

Fixed operating costs ________.

Accepted Answer

A)  are not included in COGS 
B)  are not direct costs of creating each product 
C)  include expenses like rent 
D)  All of the above. 
A)  are not included in COGS 
B)  are not direct costs of creating each product 
C)  include expenses like rent 
D)  All of the above.

Question 15

Other variable costs per unit subtracted from Total COGS per unit equals ________.

Accepted Answer

A)  cost of goods sold per unit 
B)  contribution margin per unit 
C)  total other variable costs per unit 
D)  operating margin per unit 
A)  cost of goods sold per unit 
B)  contribution margin per unit 
C)  total other variable costs per unit 
D)  operating margin per unit

Question 16

A litmus test for profitability is ________.

Accepted Answer

A)  the business plan 
B)  the economics of one unit (EOU) 
C)  the business model 
D)  net profit 
A)  the business plan 
B)  the economics of one unit (EOU) 
C)  the business model 
D)  net profit

Question 17

Give three reasons to keep good records every day.

Accepted Answer

Keeping good records will show you how t

Question 18

There are two categories of variable costs: ________.

Accepted Answer

A)  net variable costs and cost of goods sold 
B)  gross costs and net variable costs 
C)  cost of goods sold and other variable costs 
D)  interest and taxes paid 
A)  net variable costs and cost of goods sold 
B)  gross costs and net variable costs 
C)  cost of goods sold and other variable costs 
D)  interest and taxes paid

Question 19

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

Accepted Answer

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

Question 20

It is wise to keep a reserve equal to one-fourth of the start-up investment.

Accepted Answer

A) True 
 B)False

The bedrock principle of business is that it should ________.

You should keep reserves of at least ________.

Which two categories below are used for business costs?

Jenny is worried because when she calculates the EOU for her business, the gross profit is too low. Explain whether or not she could improve it by finding an office with a lower monthly rent.

Variable costs are expenses that must be paid regardless of whether sales are being generated.

Depreciation is a(n) ________.

Total Revenue divided by ________ = units sold.

Business start-up cost information can be obtained from ________.

The difference between a receipt and an invoice is that the receipt records ________.

The Thomas Register of American Manufacturers lists companies that specialize in creating ________.

The systematic recording, reporting, and analysis of the financial transactions of a business is called ________.

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

Fixed operating costs ________.

Other variable costs per unit subtracted from Total COGS per unit equals ________.

A litmus test for profitability is ________.

Give three reasons to keep good records every day.

There are two categories of variable costs: ________.

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

It is wise to keep a reserve equal to one-fourth of the start-up investment.

Entrepreneurs Recognize Opportunities

The Business Plan: Road Map to Success

Creating Business From Opportunity

Exploring Your Market

Developing the Right Marketing Mix and Plan

Smart Selling and Effective Customer Service

Using Financial Statements to Guide a Business

Cash Flow and Taxes

Financing Strategy and Tactics

Addressing Legal Issues and Managing Risk

Operating for Success

Management, Leadership, and Ethical Practices

Franchising, Licensing, and Harvesting: Cashing in Your Brand

Filters

Exam 7: Understanding and Managing Start-Up, Fixed, and Variable Costs

The bedrock principle of business is that it should ________.

You should keep reserves of at least ________.

Which two categories below are used for business costs?

Jenny is worried because when she calculates the EOU for her business, the gross profit is too low. Explain whether or not she could improve it by finding an office with a lower monthly rent.

Variable costs are expenses that must be paid regardless of whether sales are being generated.

Depreciation is a(n) ________.

Total Revenue divided by ________ = units sold.

Business start-up cost information can be obtained from ________.

The difference between a receipt and an invoice is that the receipt records ________.

The Thomas Register of American Manufacturers lists companies that specialize in creating ________.

The systematic recording, reporting, and analysis of the financial transactions of a business is called ________.

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

Fixed operating costs ________.

Other variable costs per unit subtracted from Total COGS per unit equals ________.

A litmus test for profitability is ________.

Give three reasons to keep good records every day.

There are two categories of variable costs: ________.

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

It is wise to keep a reserve equal to one-fourth of the start-up investment.

Entrepreneurs Recognize Opportunities

The Business Plan: Road Map to Success

Creating Business From Opportunity

Exploring Your Market

Developing the Right Marketing Mix and Plan

Smart Selling and Effective Customer Service

Using Financial Statements to Guide a Business

Cash Flow and Taxes

Financing Strategy and Tactics

Addressing Legal Issues and Managing Risk

Operating for Success

Management, Leadership, and Ethical Practices

Franchising, Licensing, and Harvesting: Cashing in Your Brand

Filters