Entrepreneurship - Finance Vocab

What is an expense?

• money made from products/services

• money spent on resources for the business

• a budget

A variable expense differs from a fixed expense because...

• it stays the same

• they are the same

• it changes

Which of the following is an example of a fixed expense?

• delivery expenses

• labor

• insurance

• materials

Which of the following is an example of a variable expense?

• salaries

• labor

• rent

• interest

The amount of product (or service) you use to figure your operations and profit.

• unit of sale

• materials

• variable expense

• profit

The Economics of one Unit of Sale =

• Profit (Loss) = Sales price - cost

• Revenue = Sales price - cost

• Profit = Revenue - Sales

• Contribution Margin = Selling price - variable expenses

If a company has economies of scale, they are able to

• spread costs over a larger volume of product

• spread costs over a smaller volume of product

• buy less material and sell more

• buy more material and sell more

What is an acronym to remember the common fixed costs?

• I SAID U ROX

• I SAID YOU ROC

• I SED U ROX

• I SAID YOU ROCK

What is an accounting method that allows you to spread the cost of equipment over the # of years it is used.

• Depreciation

• value

• assets

• liabilities

Break Even =

• Sales = Expenses

• Profit = Expenses

• Revenue = Fixed Expenses

• Sales = Variable Expenses