Financial Plan

Variable cost are business costs, such as rent, that are constant whatever the quantity of goods or services produced.

• Tama

• Mali

Fixed cost are costs that change as the quantity of the good or service that a business produces changes.

• Tama

• Mali

Expense is a type of expenditure that flows through the income statement and is deducted from revenue to arrive at net income.

• Mali

• Tama

Projected revenue refers to estimated money a company will generate during a specific period.

• Tama

• Mali

Revenue is the value of sales of goods and services recognized by a company in a period.

• Mali

• Tama

Daily Revenue is defined as

• a. selling price times the daily volume

• b. total cost divided by daily output.

• c. total output times cost per unit.

• d. total output divided by selling price.

If average cost is at a minimum, then

• a. it is equal to marginal cost.

• b. total cost is also at a minimum.

• c. profit is at a maximum.

• d. all of the above are true.

3. If a firm's marginal revenue is greater than its marginal cost, then the firm should

• a. increase output to increase profit.

• b. decrease output to increase profit.

• c. keep output the same.

• d. collect additional information before taking any action.

4. If a firm's average cost is equal to its average revenue, then

• a. profit is at a maximum.

• b. profit is at a minimum.

• c. profit is equal to zero.

• d. the firm is in equilibrium.

5. Business costs, such as rent, that are constant whatever the quantity of goods or services produced.

• a. expense

• b. fixed cost

• c. variable cost

• d. revenue