WorksheetsBusiness finance
Total questions: 64
Worksheet time: 53mins
Cost price is...
how much you pay for something.
how much you sell something for.
Selling price is...
how much you pay for something.
how much you sell something for.
Cost of sales are...
The cost of producing a product, otherwise called direct costs
Other costs that are not related to producing the product, otherwise known as indirect costs
Cost that do not change with output
Running costs
Expenses are...
The cost of producing a product, otherwise called direct costs
Other costs that are not related to producing the product, otherwise known as indirect costs
Cost that do not change with output
Running costs
Expenses can be referred to as 'Overheads'.
True
False
Which of the following formula is correct for working out net profit?
= price x units (output or Sales)
= revenue – cost of sales
= gross profit - expenditure
= Fixed costs + variable costs
Which of the following formula is correct for working out gross profit?
= price x units (output or Sales)
= revenue – cost of sales
= gross profit - expenditure
= Fixed costs + variable costs
Which of the following formula is correct for working out sales revenue?
= price x units (output or Sales)
= revenue – cost of sales
= gross profit - expenditure
= Fixed costs + variable costs
Which three lines of the profit and loss account would make up the trading account?
Sales Revenue, Cost of Sales and Gross Profit
Sales Revenue, Expenses and Gross Profit
Sales Revenue, Cost of Sales and Net Profit
Net Profit, Cost of Sales and Gross Profit
Using this profit and loss account, complete the answer for Gross Profit.
£11,000
£10,000
£30,000
£35,000
Profit and Loss is a planning tool.
True
False
If gross profit was negative, which of the following may be a good ideas?
Increase Marketing
reduce fuel bills
pay cheaper wages
find cheaper materials
If net profit is negative then which of the following may be good ideas?
Increase gross profit
reduce expenses
reduce sales revenue
increase rent
Why would a shareholder be interested in a profit and loss account?
Because they get paid a dividend out of the profits the company makes
It would show them how ethical the business is
It would tell them when the business would breakeven
It would show how much tax they paid
Why would the Government be interested in a profit and loss account?
Because they get paid a dividend out of the profits the company makes
It would show them how ethical the business is
It would tell them when the business would breakeven
It would show how much tax they paid/need to apy
The table below gives information about two different products sold by a business. Based on this information, which one of the following is the correct sales price per unit for product B?
£2.50
£1.25
£0.80
£0.40
A break even diagram for Business X is shown below. Based on this information, which one of the following is the correct value of its fixed costs at 3,000 units?
£20,000
£40,000
£50,000
£90,000
Using the break even diagram shown in question 3, if Business X’s actual sales were 3,000 units, which one of the following would be its correct margin of safety?
0 units
1,000 units
2,000 units
3,000 units
A business has an agreed overdraft limit of £10,000, which it has used 75% of, on average, throughout the year. The interest rate on the overdraft facility is 15% per annum. Which one of the following represents the amount of interest the business paid this year on its overdraft?
£1,125
£1,500
£7,500
£8,625
The graph below shows the number of customers that visited a hairdressing business during one trading week. The average sales price per customer is £30. Based on this information, the business’s average daily trading revenue to the nearest £ is:
£43
£909
£1,272
£6,360
Last year, a business made £300,000 profit from sales revenue of £750,000. Its total variable costs equalled £125,000. The value of the business’s fixed costs was:
£175,000
£325,000
£450,000
£625,000
If the business in question 7 sold 100,000 units during the year, its variable cost per unit equalled:
£0.80
£1.25
£3.00
£7.50
A business takes out a bank loan of £15,000. The loan will be repaid over 3 years, with a monthly repayment of £500. The total interest the business will pay for this loan is:
£1,500
£3,000
£15,500
£8,000
A small business has fixed costs of £24,000 and an average sales price per unit of £9. If the variable cost per unit is 1/3 of the sales price per unit, which of the following is the business’s break even point in units?
2,000 units
2,667 units
4,000 units
8,000 units
The small business, in question 10, expects that its fixed costs will increase by 25% next year. To overcome this change, the business plans to increase its sales price per unit by 100%. Its variable cost per unit is expected to remain as 1/3 of the sales price per unit. Which one of the following is the business’s break even point in costs/revenue?
£30,000
£36,000
£45,000
£90,000
Which two of the following statements best describe the term break even? Select two answers:The point where:
The business is just making a profit
Total revenue and total fixed costs are the same
The business is making neither a profit or loss
Total costs are higher than total revenue
Total revenue and total costs are equal
In which two of the following situations would a business be in a loss making situation? Select two answers: Where:
Total revenue is greater than the sum of total fixed costs and total variable costs
Total revenue is less than total variable costs and total fixed costs
Total fixed costs and total variable costs are lower than total revenue
Total costs are less than total revenue
Total costs are higher than total revenue
What is the break-even point in units for a company whose total fixed costs are £275,450; selling price per unit is £16; and variable cost per unit is £14.75?
220,360
150,300
183,633
225,120
We are going to manufacture Whats-Its. The Whats-It machine costs £4000.It also costs £5 for materials and labour for each Whats-It. We are planning to sell our Whats-Its for £12 each. How many Whats-Its must we sell in order to breakeven?
571.42
572
570. 63
571
What is the break-even point in units for a company whose total fixed costs are £275,450; selling price per unit is £16; and variable cost per unit is £14.75?
220,360
150,300
183,633
225,120
Fixed costs: = £30,000
Variable cost: = £200 per photo shoot
Forecast output (Sales): = 140 photo shoots
Selling price: = £1000 per photo shoot
What is the Total Contribution?
£112 000
£112 500
£375
£800
Simon has worked out the following figures for new Bobble Hats he is going to sell. He estimates that he can produce 20 000 hats a month with a selling price of £3.50. He expects the machinery costs to be £60 000 per annum, staff salaries are £72 000 per annum and raw materials cost £30 000 per month.
What is the margin of safety?
66 000
74 000
200 000
174 000
Baljeevans Burgers has sales of 250 units, a sales revenue of £26 500, total variable costs of £12 340 and total fixed costs of £4 600 (all annual figures).
Calculate the Total Contribution
£56.64
£14 160
£14 410
£566.40
Baljeevans Burgers has sales of 250 units, a sales revenue of £26 500, total variable costs of £12 340 and total fixed costs of £4 600 (all annual figures).
Calculate the Contribution per unit
£56.64
£14 160
£14 410
£566.40
Baljeevans Burgers has sales of 250 units, a sales revenue of £26 500, total variable costs of £12 340 and total fixed costs of £4 600 (all annual figures).
Calculate the Profit or Loss
£9 560
£95 600
£662 5000
£660 8060
Calculate the total contribution from the first 100 customers
£65
£650
£6 500
£65 000
Calculate the Break Even Quantity
65
650
365
3 650
Calculate the expected profit from the first year of trading, based on the assumption that it will attract 450 customers.
£552
£55 250
£5 525
£37 225
£29 250
Fixed Costs £42 525
Variable Costs £3 per Item
Forecast Output (Sales) 11 262
Sales Revenue £135 144
What is the Break Even?
4725
12
5000
None of these
