Retail Profit Model Test-5

Front

Explain the concept of psychological pricing with an example.

Back

Psychological pricing is a strategy that uses odd numbers, such as $9.99, to make the price seem lower and more appealing to consumers.

Front

What are the components included in the cost of goods sold?

Back

Direct costs of producing the goods

Front

What is the formula to calculate gross profit margin?

Back

(Gross Profit / Revenue) * 100

Front

Why is gross profit margin important for a retail business?

Back

It shows the efficiency of the business in generating profit.

Front

What are operating expenses in the context of a retail business?

Back

Costs associated with running the day-to-day operations of the business

Front

Choose the option with the examples of operating expenses in a retail business: Taxes, interest expenses, legal fees, Rent, utilities, salaries, insurance, marketing, maintenance costs, Employee benefits, customer refunds, product development, Cost of goods sold, inventory, shipping

Back

Rent, utilities, salaries, insurance, marketing, maintenance costs

Front

How is net profit calculated?

Back

By subtracting total expenses from total revenue.

Front

Why is it important for a retail business to monitor and improve its net profit?

Back

It directly impacts the financial health and sustainability of the business.

Front

Which of the following refers to the total amount of money that a retailer brings in? (4.1) Options: Profit, Revenue, Cost of Goods Sold, Operating costs

Back

Revenue

Front

Which of the following refers to the amount of money that a retailer makes after accounting for expenses? (4.1) Options: Profit, Revenue, Cost of Goods Sold, Operation costs

Back

Profit