Entrepreneurship Lesson 4.04 Review

Operating expenses are the opposite of

• Capital Expenditures

• Fixed Expenses

• Variable Expenses

• Utilities

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

• mixed

• semi-variable

• fixed

• variable

Operating costs that fluctuate with changes in production are called _______ expenses.

• fixed

• variable

• total

• capital

Sales commissions are a _______ expense.

• one-time

• capital

• variable

• fixed

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

True or False......Some operating costs may be considered fixed or variable.

• True

• False

True or False.....Purchasing a piece of equipment is an operating expense.

• False

• True

Most businesses' approach to operating costs is to

• keep them as low as possible

• spare no expense on quality

• eliminate them completely

• focus on variable expenses rather than fixed

The sum of operating and direct expenses required to make a product is its

• price markup

• gross cost

• total cost

• break-even point

The difference between the selling price and how much it costs to make a product is the

• gross profit

• price markup

• commission

• tax