WorksheetsSGS Business Unit 1 Finance Knowledge Test
Total questions: 25
Worksheet time: 17mins
What assumption does this statement say "Break even is 54 units"?
if we sell 55 we aren't making a profit
if we sell 54 we begin to make a profit
if we sell 55 we begin to make a profit
if we sell 54 we are not yet at break even point
What is the formula for contribution?
cost price - selling price
fixed costs - variable costs
selling price - variable cost
selling price - cost price
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
Which option is the correct formula to calculate total sales revenue?
Selling price per unit x output sold
Total fixed costs + total variable costs
Unit cost x output
Total inflows - total outflows
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 option represents the amount of interest the business paid this year on its overdraft?
£1,125
£1,500
£7,500
£8,625
Last year, a business made £300,000 profit from sales revenue of £750,000. Its total variable costs equalled £125,000. What was the value of the business’s fixed costs?
£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 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
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
A negative figure on the closing balance of a cash-flow forecast is called
Surplus
Profit
Deficit
Loss
Which two are ways a business could improve its cash flow position?
Increase overheads
Negotiate discounted prices with suppliers
Reduce receipts
Increase payments
Reduce stock levels in the business
Which is an example of an external source of finance?
Owners' Funds
Sale of assets
Retained profits
Bank loan
What is an advantage of an overdraft?
There is never interest
You can pay in smaller installments
Useful for relatively small sums and short term finance
You don't have to pay it back
Which of the following are DISADVANTAGES of selling shares as a source of funds? (select as many as appropriate)
It means limited liability for the owners
Dividends need to be paid to shareholders
Large sums of money can be raised
Does not apply to Partnerships or Sole Traders
