Blank Quiz 33

What is cost analysis?

• Cost analysis is the evaluation of costs related to a project or service to assess its financial viability.

• Cost analysis is the assessment of employee performance in a company.

• Cost analysis involves calculating the total revenue generated by a project.

• Cost analysis is the process of determining the market price of a product.

Why is cost analysis important in procurement?

• Cost analysis is irrelevant to budget management.

• Cost analysis is important in procurement because it enables informed decision-making, identifies cost-saving opportunities, and aligns purchasing with budget constraints.

• Cost analysis is only necessary for large companies.

• Cost analysis focuses solely on supplier relationships.

Name one method of cost analysis.

• Variance Analysis

• Cost-Volume-Profit Analysis

• Standard Costing

• Activity-Based Costing (ABC)

What does the term 'fixed costs' mean?

• Fixed costs vary with production levels.

• Fixed costs are expenses that remain constant regardless of production levels.

• Fixed costs are only incurred during production.

• Fixed costs are expenses that can be easily changed.

How do variable costs differ from fixed costs?

• Variable costs are always higher than fixed costs.

• Fixed costs change with production levels; variable costs do not.

• Variable costs are predictable while fixed costs are unpredictable.

• Variable costs fluctuate with production levels; fixed costs remain constant.

What is a break-even analysis?

• A break-even analysis is a tool for measuring employee performance.

• A break-even analysis is a method to calculate profit margins.

• A break-even analysis is a financial calculation to determine the sales volume at which total revenues equal total costs.

• A break-even analysis is a strategy for reducing expenses.

Can you give an example of a direct cost?

• Cost of employee salaries

• Cost of advertising campaigns

• Cost of office supplies

• Cost of raw materials used in manufacturing a product

What is the purpose of a cost-benefit analysis?

• The purpose of a cost-benefit analysis is to evaluate the financial implications of a decision by comparing costs and benefits.

• To analyze historical data for future predictions.

• To determine the best marketing strategy for a product.

• To assess employee performance in a company.

How can understanding costs help a business?

• Understanding costs leads to higher operational risks.

• Understanding costs increases employee turnover.

• Understanding costs helps a business improve profitability, set pricing strategies, and make informed financial decisions.

• Understanding costs eliminates the need for market research.

What is the difference between qualitative and quantitative analysis?

• Qualitative analysis is always more accurate than quantitative analysis.

• Qualitative analysis uses numerical data, while quantitative analysis is descriptive.

• Quantitative analysis focuses on opinions, while qualitative analysis focuses on statistics.

• Qualitative analysis is descriptive and non-numerical, while quantitative analysis is numerical and statistical.