(2) Revenues, Costs, and Profits

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?

If the business sold 100,000 units during the year, what was its variable cost per unit?

Which two of the following statements best describe the term break even?

• 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?

• Total revenue is less 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

Which of the following 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

Based on the information provided, what is the correct sales price per unit for product B?

• £2.50

• £1.25

• £0.80

• £0.40

The graph shows the number of customers that visited a hairdressing business during one trading week. What is the business's average daily trading revenue to the nearest £?

• £43

• £909

• £1,272

• £6,360

Using the break-even diagram shown in the previous question, if Business X's actual sales were 3,000 units, what would be its correct margin of safety?

• 0 units

• 1,000 units

• 2,000 units

• 3,000 units

A break-even diagram for Business X is shown below. What is the correct value of its fixed costs at 3,000 units?

• £20,000

• £40,000

• £50,000

• £90,000

A business has an agreed overdraft limit of £10,000, which it has used 75% of, on average, throughout the year. What represents the amount of interest the business paid this year on its overdraft?

• £1,125

• £1,500

• £7,500

• £8,625