3.1 Business Costs Toms T Shirts (HW 15)

What are the two main categories of costs in a business?

• Primary and Secondary Costs

• Fixed and Variable Costs

• Direct and Indirect Costs

• Operational and Capital Costs

Which of the following is an example of a variable cost?

• Rent

• Raw Materials

• Salaries

• Insurance

How much does Tom's Tops spend on variable costs per t-shirt?

• £20

• £10

• £5

• £15

If Tom produces 500 t-shirts in a month his variable costs are £5 per t shirt, what are his total variable costs?

• £3,000

• £2,000

• £1,500

• £2,500

Which of the following is NOT a fixed cost for Tom's Tops?

• Electricity

• Insurance

• Salaries

• Rent

Using the video, What is the total fixed cost for Tom's Tops per month?

• £2,500

• £2,000

• £1,900

• £1,500

How do you calculate the total cost for a business?

• Fixed Costs / Variable Costs

• Variable Costs x Fixed Costs

• Fixed Costs - Variable Costs

• Fixed Costs + Variable Costs

What is Tom's total cost for the month?

• £4,500

• £4,400

• £5,000

• £4,000

How much revenue does Tom need to break even if his total cost is £4,400?

• £4,000

• £4,500

• £5,000

• £4,400

If Tom sells each t-shirt for £10, what is his profit for the month?

• £800

• £700

• £600

• £500