Expenses Review

There are 3 different types of expenses. ​ (a)   are expenses that you must purchase before you start your business. These include things like​ (b)   . ​ (c)   are expenses that do not need to be replaced after every sale, like utilities or employee payroll. The last type of expense is a ​ (d)   which must be replaced after every sale, and includes ingredients and ​ (e)   .

• Startup Expenses
• Fixed Expenses
• equipment
• Variable Expense
• materials
• depreciation

Categorize each expense as a fixed or variable expense.

Groups:

(a) Fixed Expense

,

(b) Variable Expense

• Electricity

• Advertising

• Payroll Tax

• Spoons

• Sprinkles

• Internet

• Rent

• Depreciation

• Phone

• Insurance

• Payroll

• Ice Cream

• Ice Cream Cone

All of the variable expenses needed to make your unit of sale is the

Gage is asked "How much does it cost to make your product?". This would be the same thing as his

• Cost of Goods Sold

• Total Montly Fixed Expense

• Startup Expenses

• Burn Rate

The price you sell your unit of sale to customers for is your

• Selling Price

• Fixed Expense

• Cost of Goods Sold

• Contribution Margin

Contribution Margin is how much each unit of sale ​ (a)   your company's profitability

• contributes to
• takes away from
• is spread out over

The amount of units you must sell in order to break-even, which means to not lose money or make money

How many months your business can go before you run out of cash is referred to as your

• Burn Rate

• Break-even Point

• Startup Expense

• Investment

Categorize the following statements about Sales Forecasting as TRUE or FALSE

Groups:

(a) True

,

(b) False

• Sales forecasting is based on your best estimate

• Sales forecasting is a burden on the company's finances

• You must get your sales forecasting EXACTLY right

• Sales forecasting is an unnecessary step for an entrepreneur

• Sales forecasting is a hindrance to business growth

• Sales forecasting helps you set business goals and give investors expectations

• You can figure your sales forecast by talking to other business owners

• Sales forecasting is a distraction from more important business activities

• Sales forecasting can help in setting realistic sales targets and budgets

• Sales forecasting is just guesswork and speculation

• Sales forecasting is a waste of time and resources

• Your sales will probably be low in the first few months of operation

What do you think is the most important part of a financial plan? (2-3 complete sentences)