OYF - Chapter 10 Test - Economics of One Unit

Which of the following is not a common fixed expense?

• rent

• labor

• salaries

• utilities

Expenses that are not affected by the number of products a business sells are called

• variable expenses

• fixed expenses

• contribution margin

• selling expenses

Using the straight-line method of depreciation, what is the annual depreciation expense for an automobile that costs $30,000, has a five-year life for the business, and can then be sold for $10,000?

• $7,000

• $6,000

• $5,000

• $4,000

Fixed expenses

• can never change

• change every year

• can change from time to time

• change in relation to products sold

One example of other variable expenses would be

• commissions

• labor

• materials

• supplies

Expenses that change based on the quantity of goods a business sells in a given period of time are called

• fixed expenses

• variable expenses

• fluctuating expenses

• selling expenses

Which of the following four types of business does not typically sell products?

• manufacturing

• retail

• service

• wholesale

Which of the following is not used in determining the contribution margin?

• variable expenses

• fixed expenses

• cost of goods sold

• other variable expenses

In a service business, an entrepreneur charges $500 for the job, pays a commission of 10% of sales, and has a cost of services sold per unit of $100. What is the entrepreneur’s contribution margin per unit?

• $350

• $300

• $395

• $400

In a wholesale business, which of the following would you not expect to see in an EOU?

• materials

• other variable expenses

• total variable expenses

• contribution margin