1.3.2 Revenue costs and profits and break-even

Sales price x quantity is the formula for which of the following?

• Profit

• Total costs

• Revenue

• Total variable costs

Which two of the following are business key terms that have the same meaning as revenue? Select two answers:

• Income

• Turnover

• Profit

• Cash inflows

• Receipts

Which one of the following is the correct formula to calculate a firm’s variable cost per unit?

• Total costs / output

• Total variable costs / output

• Output / total costs

• Output / total variable costs

Which of the following best defines the term variable cost? A cost which:

• Stays the same regardless of output

• Changes according to output

• Changes with time

• Are only paid when the business first sets up

Which two of the following are examples of variable costs? Select two answers:

• Salaries of management

• Insurance

• Rent

• Raw materials

• Packaging

Which one of the following best describes a fixed cost? A cost that:

• Changes directly with output

• Stays the same regardless of output

• Only needs to be paid once, when the business first starts-up

• Needs to be paid once a month

Which one of the following is the correct formula to calculate total costs?

• Total costs minus total variable costs

• Total fixed costs plus total variable costs

• Total costs plus total variable costs

• Total fixed costs minus total variable costs

The table below gives information about Business A. Based on this information, Business A’s total fixed costs are:

• £10,000

• £30,000

• £40,000

• £70,000

A business sells 12,000 units per year. Fixed costs per year are £50,000 and variable costs are £2.50 per unit. The business’s total costs are:

• £30,000

• £54,800

• £62,000

• £80,000

The chart below shows the weekly breakdown of total costs for a small business. Based on this information, the weekly value of variable costs as a percentage of weekly total costs is:

• 20%

• 25%

• 80%

• 400%