Cost and budgeting

Which of the following is NOT a reason why costs are important to a business

• to charge right price for the product

• to keep the employees motivated

• to calculate whether a new business will make profit or not

• to help managers to take major decisions

Which one of the following is NOT considered to be a cost?

• rent

• salary

• sales revenue

• insurance

The price at which goods or services are offered to their customers by a business is called:

• selling price

• cost

• inventory

• variable cost

Costs that do not change in the short term, regardless of output are called:

• variable costs

• fixed costs

• average costs

• total costs

Fixed cost + variable cost =

• average costs

• total costs

• marginal costs

• unit costs

Costs that change based on the amount of goods and services produced

• total costs

• fixed costs

• variable costs

• average costs

Rent, administrative costs, advertising, employee salary are examples of:

• costs

• total costs

• variable costs

• fixed costs

Raw materials, packaging, labour costs, are examples of:

• fixed costs

• variable costs

• total costs

• profit

What is revenue?

• the same as profit

• money coming into a business when customers buy a product

• the amount of money a business makes after all the costs have been paid

• money a business spends on business activities

What are costs?

• the money coming into a business when customers buy a product

• the money a business spends on business activities

• the money business invests