Edexcel A-Level Business MCQs - Theme 2

What is the formula for capacity utilisation?

• Maximum output / Actual output x 100

• Fixed costs / Contribution per unit

• Actual output / Maximum possible output x 100

• Total sales / Total costs x 100

What does the margin of safety represent?

• The difference between actual output and breakeven output

• Fixed costs plus variable costs

• Total sales minus total costs

• Total profit earned

What is gross profit?

• Total profit minus tax

• Cost of sales minus expenses

• Revenue minus cost of sales

• Revenue minus expenses

What does operating profit margin measure?

• Expenses over time

• Profit per customer

What is extrapolation?

• Using past trends to predict future values

• Plotting correlation data

• Setting unrealistic goals

• Removing seasonal effects

What is the formula for capacity utilisation?

• Fixed costs / Contribution per unit

• Maximum output / Actual output x 100

• Actual output / Maximum possible output x 100

• Total sales / Total costs x 100

What does the margin of safety represent?

• Total sales minus total costs

• The difference between actual output and breakeven output

• Fixed costs plus variable costs

• Total profit earned

What is gross profit?

• Cost of sales minus expenses

• Revenue minus cost of sales

What does operating profit margin measure?

• Operating profit as a percentage of revenue

• Expenses over time

• Revenue as a percentage of profit

• Profit per customer

What is extrapolation?

• Using past trends to predict future values

• Plotting correlation data

• Setting unrealistic goals

• Removing seasonal effects