the Business Costs And Revenue Quiz Part- II
This is part- II to The Business Costs And Revenue Quiz. When running a business it is important while planning to ensure that the costs do not exceed total revenues you get. Do you think you are well informed on the balance between cost and revenues? To help ensure you are before the business exam. Take it up and see how ready you are.
- 1.Which of the following is a reason for managers knowing the costs of the business?
- A.
They will be able to increase output.
- B.
It will help them fix the price of the product(s).
- C.
The information would have to be published to shareholders.
- D.
Costs will tell the managers, without any other information, what the profits of the business are.
- 2.Which one of the following costs is most likely to be variable for a fast food restaurant?
- A.
The salary of the manager
- B.
The rent of the restaurant
- C.
The cost of the food supplies
- D.
The machinery used to cook the food
- 3.The best definition of variable costs is:
- A.
They vary with the number of units produced.
- B.
They vary over time.
- C.
They vary with the prices charged by suppliers.
- D.
They vary with tax rates set by government.
- 4.If variable costs are $3 per unit, then the total variable costs of producing 3,500 units will be:
- A.
$3,500
- B.
$35,000
- C.
$1,050
- D.
$10,500.
- 5.The best definition of fixed costs are those that do not vary with:
- A.
Time
- B.
Seasons
- C.
Output
- D.
Number of workers.
- 6.The total revenue of a business is:
- A.
The same as profit
- B.
Equal to total costs
- C.
Quantity of units produced multiplied by cost of producing each unit
- D.
Quantity of units sold multiplied by the selling price.
- 7.The break-even level of output is that number of units where:
- A.
Profit is at its highest level
- B.
Variable costs equal revenue
- C.
Total costs equal revenue
- D.
Variable costs equal fixed costs.
- 8.If maximum output is 10,000 units, current output is 8,000 units and break-even output is 4,500 units, then the safety margin is equal to:
- A.
2,000 units
- B.
5,500 units
- C.
4,500 units
- D.
3,500 units.
- 9.A product sells for $7. Material and other variable costs are $3. Fixed costs are $60,000. The break-even level of output is:
- A.
15,000 units
- B.
60,000 units
- C.
20,000 units
- D.
We cannot tell from the information given.
- 10.The best definition of the contribution made by a product is:
- A.
The profit made on each item sold
- B.
The revenue gained from selling each item
- C.
The difference between price and variable cost
- D.
The difference between price and fixed cost.
- 11.If total fixed costs of a business are $2,000 per week, variable costs are $3 per unit and the firm produces 500 units per week, then the average total cost is:
- A.
$3
- B.
$5
- C.
$2,003
- D.
$7.
- 12.Which of the following is the best definition of economies of scale?
- A.
Costs fall as output increases.
- B.
Costs per unit fall as the firm expands.
- C.
Average costs rise as the firm expands.
- D.
Fixed costs fall as output increases.
- 13.Which of the following is NOT an example of an economy of scale as a computer manufacturer increases its scale of operation?
- A.
Supplies of components are bought at a lower average cost.
- B.
The price of the product to the consumer falls.
- C.
Expert managers can be employed to increase efficiency.
- D.
The most advanced equipment can now be purchased.
- 14.A detailed financial plan for the future’ is a definition of which of the following terms?
- A.
Scatter diagram
- B.
Sales revenue forecast
- C.
A budget
- D.
Estimate of production costs.
- 15.business was budgeted to earn sales revenue of $28,000 last year and budgeted costs were $18,000. At the end of the year, the actual revenue was $29,000 and total costs were $17,000. Which of the following is the profit variance?
- A.
$2,000
- B.
$12,000
- C.
$1,000
- D.
$29,000
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