Entrepreneurship 4.04

Which of the following is another name for operating cost:

• overhead

• capital expeditures

• fixed expenses

• variable expenses

Which of the following is a true statement regarding costs:

• They are fixed expenses.

• They are not directly related to production.

• They occur once or twice a year.

• Only some businesses have them.

Operating costs are the opposite of

• utilities

• variable exenses

• fixed expenses

• capital expenditures

Operating costs that do not increase or decrease in production are called _______ expenses.

• mixed

• semi-variable

• fixed

• varialble

A business's rent or mortgage is a __________ expense.

• variable

• semi-variable

• semi-fixed

• fixed

Operating cost that fluctuate with changes in production are called ________ expenses.

• variable

• fixed

• capital

• total

Sales commissions are a ________ expense.

• one-time

• capital

• fixed

• variable

Operating costs that are fixed until the business reaches a certain level of production and then become variable are known as ________ expenses.

• fluctuating

• unfixed

• semi-variable

• capital

Considered together, salaries and sales commissions are a

• semi-fixed expense

• capital expenditure

• direct production cost

• type of payroll tax

Which of the following is a true statement regarding operating costs:

• Purchasing a piece of equipment is an operating cost.

• They are usually divided into selling expenses and manufacturing expenses.

• Some may be considered either fixed or variable.

• Businesses spend more on operating costs than production costs.