Simple Cost Calculation

Which of the following is a fixed cost?

 

•   A) Wages for hourly workers

    

• B) Cost of utilities

    

• C) Cost of raw materials

•  D) Rent for the factory

How does the price an entrepreneur charges affect the business?

•    A) It determines the quality of the product

    

• B) It affects how much profit the business makes

    

• C) It has no impact on the business

•    D) It determines the number of employees needed

Why is it necessary to work out the cost of your product?

•    A) To create a marketing strategy

    

• B) To determine the best location for the business

•    C) To work out a selling price

    

• D) To decide the number of products to produce

What is the cost price of a product?

•    A) The amount of money customers are willing to pay

    

• B) The amount of money it costs a business to manufacture the item

•    C) The total revenue from sales

•    D) The price listed on the product's label

What are the two main components of the cost price?

•    A) Advertising costs and labor costs

   

•   B) Rent costs and utility costs

   

• C) Variable costs and fixed costs

•    D) Shipping costs and packaging costs

Which of the following is a variable cost?

•    A) Rent for the factory

    

• B) Monthly internet bill

    

• C) Cost of raw materials

•    D) Insurance premiums

What are fixed costs?

• A) Costs that vary with the level of production

• B) Costs that do not change with the level of production

• C) Costs that only occur once

• D) Costs that increase with the number of products made

Why must fixed costs be paid each month?

• A) They depend on the number of products made

• B) They are linked to the production level

• C) They vary with the amount of raw materials used

• D) They are regular expenses that do not change

What are variable costs?

• A) Costs that remain constant regardless of production level

• B) Costs that change with the level of production

• C) Costs that occur only once

• D) Costs that are not directly linked to production

What is the selling price?

• A) The cost of production

• B) The amount paid to suppliers

• C) The amount for which the product/service is sold to customers

• D) The sum of fixed and variable costs