Enterprise and Marketing LO2 MCQ

Which of the following is an example of a variable cost for a coffee shop?

• Buildings insurance

• Interest on a start-up loan

• Milk

• Newspaper advertising

Which letter on the diagram above shows the break-even point for the product?

• A

• B

• C

• D

What does Line X represent on the break-even graph?

• Fixed costs

• Sales revenue

• Total costs

• Variable costs

A variable cost can be best defined as:

• a cost that cannot be measured

• a cost that changes with demand

• a cost that changes with output

• a cost that increases and decreases

If total revenue is equal to total cost, a business will:

• Break even

• Increase prices

• Make a loss

• Make a profit

Which of the following is an example of a fixed cost for a shoe retailer?

• Carrier bags

• Ink cartridges for the cash till

• Insurance for the shop premises

• Shoe boxes

The owner of Hair by Hari Ltd forecasts that it will cut the hair of 60 customers during its first month of opening.

The average price for a haircut will be £45. How much sales revenue will be made during the first month of trading?

• £270

• £2700

• £2900

• £27000

‘Salaries’ are an example of:

• Fixed costs

• Profit

• Sales revenue

• Variable costs

How much profit is made if a business earns £18 000 of sales revenue and its total costs are £7 500?

• £8 000

• £10 500

• £25 500

• £135 000

Sarah runs a business selling flowers. Last week she earned £1 350 of sales revenue.

If last week Sarah’s average selling price per bunch of flowers was £15, how many bunches of flowers did she sell?

• 9

• 45

• 90

• 135