Unit 4 ENV Test Review

A litmus test for profitability is the ________.

• Optional features
• Economics of one unit (EOU)
• The money borrowed (IOU)
• A focus on quality

What is the estimated time required to earn sufficient net cash flow to cover the start-up investment?

• Recovery period
• Repayment estimate
• Net cash flow period
• Payback period

Carla sells hot coffee, cider and tea from a sidewalk cart near Wall Street in New York City. Last month she sold $4,500 worth of product to 1,000 customers. She spent $800 on buying her beverages in bulk. Her monthly costs are: Utilities = $100, Salary = $2,000, Advertising = $0, Insurance = $0, Interest = $0, Rent (cart

• 3500
• 3000
• 2700
• 2000

Fixed Operating Costs ________.

• Include expenses like the DSL bill and rent
• Are not included in COGS
• Are not direct costs of creating each product
• All of the above.

Which two categories below are used for business costs?

• Gross and net
• Materials and labor
• Pre-tax and after-tax
• Fixed and variable

Which of the following is not a category of fixed costs?

• Raw materials
• Capital
• Depreciation
• Utilities

If you sell $2,500 of product, pay COGS of $800 and other variable costs of $450, what is your contribution margin in dollars?

• 2050
• 1700
• 1250
• 2450

Which of the following would be a start-up cost for an internet business?

• A URL
• Computers
• Licenses
• All of the above

There are two categories of variable costs: ________.

• Cost of goods sold and other variable costs
• Gross costs and net variable costs
• Gross variable costs and net costs
• Net variable costs and cost of goods sold

If a business has total gross profit of $14,720 and total operating costs of $11,500, what is its total profit?

• 3220
• 1150
• 3000
• 26220