Business Studies: Finance basics

A worker is paid 'piece rates' for each item he/she completes. This cost would normally be treated as a …

• Fixed cost
• Selling cost
• Variable cost
• Marketing cost

Variable costs …

• Change in direct realtion to changes in output
• Do not vary in proportion to sales
• Arise as direct result of incurring overheads
• Cary in relation to fixed costs

The fixed costs of a local staore would not include …

• Council tax on the store
• Rent
• Lighting and heating costs
• Payment for stocks of fruit and veg

The revenue a firm earns in a period of time depends upon …

• Selling price only
• Quantity sold only
• Selling price and quantity sold
• Selling price and cost

Rosie had annual sales of £100,000 from selling 10,000 books at £10 each. If she increases the selling price by 10% but quantities fall by 5%, what will her revenue be?

• £105,000

• £104,500

• £110,000

• £94,500

Some costs, like agent's fees, are directly related to revenues achieved. True or false?

• False

• True

A business is making a lost when …

• Variable costs exceed fixed costs

• Fixed costs are higher than revenues

• Sales revenues are greater than total costs

• Total costs exceed total revenues

By how much would profit change if revenues rose by £150,000, variable costs increased by £75,000 and fixed costs fell by £25,000?

• £50,000

• 25,000

• £100,000

• £75,000

The total costs of business D are £25,000. If business D makes a loss of £12,500, what are its sales?

• Loss of £12,500
• Sales of £12,500
• Sales of £37,500
• Loss of £37,500

In the long run, in order to survive, a business must charge a price that covers …

• Its variable costs

• Its running costs

• Its set-up costs

• Its total costs