Ent 2 Hughes Standard 2

Standard 2.02: Why is it important for a business to calculate its break-event point?

• 1. To determine the point where total revenue equals total expenses.

• 1. To maximize taxes.

• 1. To set employee salaries.

• 1. To find out how much to invest in the stock market.
     
     

1. Standard 2.02: Which of the following is an example of an indirect cost in a business?

• 1. Raw materials used to make a product.

• 1. Factory worker wages.

• 1. Rent

• 1. Packaging for products.
     
     

1. Standard 2.01: Which of the following is included in the cost of sales for a business?

• 1. Rent for office space

• 1. Advertising expenses

• 1. Raw materials used to produce goods.

• 1. Employee training costs.
     
     

1. Standard 2.01: Which of the following is NOT considered a typical start-up category for a new business?

• 1. Equipment and Supplies

• 1. Marketing and Branding

• 1. Business travel expenses

• 1. Legal and Licensing
     
     

1. Standard 2.02: A company produces handmade furniture.  Which of the following should be classified as a direct cost?

• 1. Electricity bill

• 1. Wood and nails

• 1. Cost of advertising

• 1. Salary
     
     

1. Standard 2.02: A company sells a product for $50 each.  The total fixed costs are $10,000 and the variable cost per unit is $30.  How many units must be sold to break even?

• 1. 200

• 400

• 500

• 300

1. Standard 2.01: What is the first step in determining the cost of a new product?

• 1. Setting a random price based on competitors.

• 1. Identifying all production and material costs.

• 1. Choosing a price that feels right.

• 1. Asking customers how much they would pay for it.
     
     

1. Standard 2.03: What defines a variable expense?

• 1. It stays the same regardless of sales.

• 1. Changes based on business activity.

• 1. Always a one time cost

• 1. It is a long-term cost that never changes.
     
     

1. Standard 2.03: Which of the following is an example of a fixed expense?

• 1. Raw materials

• 1. Employee wages

• 1. Monthly rent

• 1. Utility bills that change each month
     
     

1. Standard 2.01: How is sales revenue calculated?

• 1. Total expenses - total profits

• 1. Total profits * number of customers

• 1. Fixed costs + Variable Costs

• 1. Number of units sold * selling price per unit