ESB v2 Domain 4 Flashcard

Front

What is the formula for calculating Selling Price according to the image?

Back

Selling Price = (Cost * Desired Profit Margin) + Cost

Front

What does the Desired Profit Margin represent in the formula for Selling Price?

Back

The amount a business wants to earn, usually expressed as a percentage

Front

If the cost to produce a product is $100 and the desired profit margin is 20%, what would be the selling price?

Back

$120

Front

What is an Income Statement?

Back

A record of total revenues and expenses for a specific time period.

Front

What does 'Income' refer to in an Income Statement?

Back

Money received in exchange for a product or service.

Front

How is 'Net income' calculated in an Income Statement? Options: A) Net income = Income + Expenses, B) Net income = Income - Cost of Goods Sold - Expenses, C) Net income = Gross Profit - Income Tax Expense, D) Net income = Income / Cost of Goods Sold

Back

Net income = Income - Cost of Goods Sold - Expenses

Front

What does 'Gross profit' represent in an Income Statement?

Back

Gross profit = Income - Cost of Goods Sold

Front

How is 'Income Tax Expense' determined according to the information provided? Options: A) Income Tax Expense = Gross Profit + Tax Rate, B) Income Tax Expense = Gross Profit - Tax Rate, C) Income Tax Expense = Gross Profit x Tax Rate, D) Income Tax Expense = Net Income x Tax Rate

Back

Income Tax Expense = Gross Profit x Tax Rate

Front

What is the gross profit according to the given income statement practice?

Back

$7,350

Front

What is the net income according to the given income statement practice?

Back

$3,050