Entrepreneurship - Variable & Fixed Expenses

Rent Payment

• Fixed Expense
• Variable Expense

Gas to get to each of your customers around town.

• Fixed Expense

• Variable Expense

Rosie spends $23 on parts to make 3 products. She sells each product for $16. What is Rosie's profit?

• $7.00

• $10.00

• $23.00

• $25.00

Mortgage payments are what type of expense?

• Variable

• Periodic

• Fixed

Rent payments are an example of what type of expense?

• Periodic

• Variable

• Fixed

What are Fixed Costs?

• the amount of money needed to start a business

• business costs, such as rent, that do not vary because of the amount of goods produced

• costs that change depending upon the output

• the point in a business when the profits are equal to costs

If average variable cost is $10, and average selling price is $25, then what is contribution margin?

• $35

• $15

• -$15

• $40

What is a business doing when it sells output beyond the break-even point?

• Making a loss

• Making a profit

• Making neither a profit or loss

• It is not possible to tell from information provided

If a business's sales double, its variable costs will also likely

• remain the same

• decrease

• increase

A business should know its breakeven point before it starts up. True or False

• True

• False