Chapter 10 Review

The purpose of he EOU is to

• determine the amount of profit a business makes every time it sells one item.

• determine the amount of profit a business makes every time it sells two items.

• determine the amount of profit a business makes every time it sells three items.

• find the square root of 4.

The unit of sale for a retailer selling shoes is

• one shoe

• one pair of shoes

• a dozen shoes

• any amount of shoes

The economics of one unit is calculated by subtracting the ___________ of the unit from the _____________ of the unit.

• selling price, variable expenses

• variable expenses, selling price

• fixed expenses, selling price

• expenses, selling price

The contribution margin is the amount per unit a product contributes toward the company's profitability before the ___________ are subtracted.

• expenses

• variable expenses

• fixed expenses

• costs

The Cost of Goods Sold for a manufacturing business includes the cost for ______ and ______.

• products and services

• the EOU

• materials and labor

• commission and shipping costs

A typical EOU for a line of similar products could be calculated based on the average _______ of the products.

• selling price

• cost

• variable expenses

• fixed expenses

A service business used the Cost of ________ Sold to calculate its EOU.

• Goods

• Manufacturing

• Weighted Average

• Services

COGS and COSS are both ________ expenses.

• fixed

• variable

• generic

• limited

Labor costs are included in the EOU calculation for a retailer

• True

• False

A unit of sale for a wholesaler could be a carton containing many items.

• True

• False