Unit 2 - Past Exam Questions 1

Identify one example of a variable cost for a sandwich shop.

• Paying rent

• Till to record sales

• Heating and lighting

• Purchase of inventory (stock)

Identify one example of a cash inflow.

• Stock purchases

• Electricity payment

• Salaries paid to employees

• Interest gained from savings

Jeremy owns a small car repair business. In the last month he paid £1245 for car parts. He also paid an assistant mechanic £460 in wages. His rent for the month was £3200. Calculate the monthly total cost for Jeremy's business.

• Fixed costs + variable costs = Total costs

  1245 + 460 + 3200 = £4905

• Fixed costs + variable costs = Total costs

  460 + 3200 = £3660

Ed owns a small business selling plants. The price of a plant is £4.50. In the last month he has sold 1400 plants.

What is Ed's revenue for the last month?

• Number of sales x price per unit = Revenue

  1400 x 4.50 = £6300

• Number of sales x price per unit = Revenue

  1400 x 450 = 630000

William is a self-employed cleaner. He regularly buys cleaning materials. William's cleaning materials are an example of which type of cost?

• Fixed cost

• Direct cost

• Indirect cost

• Start-up cost

Ashleigh runs a designer pottery business. She has worked out that she needs to sell 120 products per month to break even. Complete the sentence about Ashleigh's business.

Ashleigh's business will ________________ if she sells less than 120 products.

• Make a profit

• Cover her start-up cost

• Make a loss

• Have a margin of safety

Identify two fixed costs for a beauty salon.

• Salary for employee

• laundry expenses

• Sales of make-up

• Rent paid for shop

• Purchase of make-up for resale

Azhar wants to expand his business. He is considering using a bank loan to fund the expansion. Which two are other external sources of finance he could use?

• Overdraft

• Grant

• Own savings

• Retained profit

Identify one source of revenue for a business.

• Rent payable

• Rent received

• Purchase of materials

• Purchase of equipment

Complete the formula for net profit.

Net profit = __________________ ______ expenditure

• Gross profit +

• Gross profit -