Ent. Unit 6 Exam Review - KM

Which of the following is NOT a variable expense incurred by a business?

• Labor to make the product

• Materials to make the product

• Shipping for the product to get to the customer

• Rent for the facility where the product is produced

What happens to the Cost of Services Sold (COSS) at a hair salon if the cost of the chemicals used to do a perm go up?

• The Cost of Services Sold increases.

• The Cost of Services Sold decreases.

• The Cost of Services Sold stays the same.  

Which one of these is NOT considered variable labor?

• Hourly pay to the person who made the product

• Commission on the sale of the product

• Annual Salary

• All of these are variable labor

Which of these would NOT be considered a unit of sale for a business?

• One large lawn mowed and edged

• One single button from a box of 1000 buttons

• One pair of shoes

• One haircut

What happens to the contribution margin when the cost of one of your materials goes up?

• The contribution margin decreases.

• The contribution margin increases.

• The contribution margin says the same.  

Which of these is a RISK if the owner of a business decides to raise their selling price of a product?

• The customer may not buy the product at the higher price.  

• The contribution margin would decrease.  

• The cost of goods sold would increase.  

What is the contribution margin for one ring at this manufacturing business?  

• $21

• $59

• $18

• $19

Fixed expenses are increased or decreased based on how much of a product a company sells.  

• True

• False

All of the following are considered fixed expenses of a business except:

• Rent

• Salaries

• Depreciation

• Commissions paid to salespeople

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

• depreciation

• interest

• insurance

• utilities' expense