Profit Calculation Quiz

What is the formula for calculating profit according to the document?

• Profit = Sales + Expenses

• Profit = Income / Expenses

• Profit = Income - Expenses

• Profit = Expenses - Income

Which of the following is NOT a category of expenses mentioned in the document?

• Fixed expenses

• Variable expenses

• Cost of goods sold

• Operational expenses

What must a business understand to make a profit, as stated in the document?

• The minimum level of customer satisfaction

• The maximum level of expenses it can incur

• The minimum level of sales needed to cover operating expenses

• The maximum level of sales it can achieve

According to the document, what is profit?

• The amount of cash you have in the bank

• The total financial gain you make from sales after all expenses are paid

• The total sales before expenses

• The total expenses subtracted from your annual income

How can turnover be calculated according to the image?

• Turnover = Number of customers + Average number of transactions per customer + Average value of each transaction

• Turnover = Number of customers x Average number of transactions per customer x Average value of each transaction

• Turnover = Number of customers / (Average number of transactions per customer + Average value of each transaction)

• Turnover = Number of customers - Average number of transactions per customer - Average value of each transaction

What is the relationship between gross profit margin, selling price, and the volume of sales required?

• The higher the gross profit margin and selling price, the higher the volume of sales required.

• The higher the gross profit margin, the lower the selling price and the higher the volume of sales required.

• The higher the gross profit margin and selling price, the lower the volume of sales required.

• Generally, the higher your gross profit margin and selling price, the lower the volume of sales required (and vice-versa).

What does the break-even point signify in a business?

• It is the point where total revenue is half of the total costs.

• It is the point where total revenue is double the total costs.

• It is the point where total revenue (sales or turnover) equals total costs, with no profit or loss.

• It is the point where the business has reached its maximum profit potential.

Identifying your break-even point helps you work out several aspects of your business. Which of the following is NOT one of them?

• Your profitable product lines

• The number of units you need to sell before you make a profit

• How much of an increase in price or volume of sales you will need to make up for an increase in fixed costs

What is the formula to calculate Gross profit?

• Gross profit = Total revenue + Costs of goods sold

• Gross profit = Total revenue - Costs of goods sold

• Gross profit = Costs of goods sold - Total revenue

• Gross profit = Total revenue / Costs of goods sold

How is the Gross profit margin calculated?

• Gross profit margin = Gross profit + Total revenue x 100

• Gross profit margin = Gross profit - Total revenue x 100

• Gross profit margin = Gross profit / Total revenue x 100

• Gross profit margin = Gross profit ÷ Total revenue x 100