ENTR Finance Unit 6 Review

Which of these is not classified as a variable expense?

• Insurance

• Labor

• Materials

• Shipping

What happens to the Cost of Goods Sold if the cost of one of the materials to make the product goes up?

• The cost of goods sold increases

• The cost of goods sold decreases

• The cost of goods sold stays the same

Which one of these is not considered variable labor?

• salary

• hourly pay + commission

• hourly pay during a busy season

• bonus paid based on sales

What happens to the contribution margin when the cost to buy your product from a manufacturer goes up?

• The contribution margin increases.

• The contribution margin decreases.

• The contribution margin stays the same.

If the selling price of your product is $16 and the variable expense to make/sell that product is $5, (a)   is the contribution margin?

Do fixed expenses increase or decrease based on how much of a product a company sells?  

• increase

• decrease

• Fixed expenses do not change based on how much of a product the company sells.

Which of these are not considered a fixed expenses?

• Rent

• Utilities

• Materials

• Equipment

An accounting method of spreading the total cost of equipment over the number of years it will be used is called - 

• expensing

• depreciation

• equating

• interest

What is the break even point?

• When the burn rate reaches a 6 month limit

• The point at which a business starts losing money

• When the business covers the cost of goods sold

• When the business has sold enough units to cover the cost of its expenses.

This is the correct formula to measure Cash Flow/Net Cash:

• Net Cash = Cash Inflow + Cash Outflow

• Net Cash = Cash Inflow * Cash Outflow

• Cash Inflow - Cash Outflow = Net Cash

• Beginning cash - ending cash = Net cash