What are variable costs?

A cost that changes the more of something you make or sell

What are fixed costs?

Costs that have to be paid no matter what you sell

What is the definition of break even?

The number of units you need to sell in order to cover costs

Income a business makes e.g. through sales

What is a running cost?

A cost that she has to pay regularly

How is revenue calculated?

Number of units sold x Selling Price

A loss is made by a business when....

Its costs are higher than its revenue

Choose two ways in which you can improve your profit.

Increase your sales revenue, Reduce your overheads

studbud

Duplicate of Finance Terminology

20 termsStudBud Administration46 plays

A quiz to test understanding of basic finance terms. Level 2 BTEC Finance for Business. #level2btecbusinessfinance

Flashcards20 cardsFPractice quizPHost liveL

Questions 20

Answers

1
What is the difference between your break even point and your expected number of sales?
Margin of Safety
Number of units produced
Sales Revenue
Variable Costs
2
What are variable costs?
A cost that increases every year
Any cost that changes
A cost that changes the more of something you make or sell
Utility costs
3
What do we deduct from Gross Profit to get Net Profit?
Direct Costs
Variable Costs
Expenditure
Overheads
4
Anna wants to set up a hair salon. Which of the following would be a start up cost?
Insurance
Chairs for the salon
Stock
Wages
5
What happens to the break even point if your total costs go up?
It goes down
It goes up
It stays the same
I dont know
6
What are fixed costs?
Costs that have to be paid no matter what you sell
Money the business pays out on stock
Where the value of the costs always stay the same
Money the business pays on wages alone
7
Which of the following does not appear as a line on a break even chart?
Variable Costs
Total Costs
Sales Revenue
Fixed costs
8
Which line is always straight on a break even chart?
Total Costs
Variable costs
Sales Revenue
Fixed costs
9
What is the definition of break even?
When a business makes a profit
When a business makes a loss
The number of units you need to sell in order to cover costs
The value of the profit you make
10
What's revenue?
Interest paid on loans
Money spent on advertising
Money paid out on wages
Income a business makes e.g. through sales</p>
11
What happens to the break even point when your sales revenue goes up?
It stays the same
I dont know
It goes down
It goes up
12
What is a running cost?
A cost that never changes
A cost that she has to pay regularly
Supplier costs
Staff costs
13
How do you calculate profit?
Revenue - Fixed Costs
Total costs - Fixed Costs
Expenditure - Tax
Revenue - Expenditure
14
How is revenue calculated?
Number of units sold x Selling Price
Fixed costs + Variable Costs
Total costs - Profit
Cost of sales - Expenditure
15
'Overheads' are another word for...
Direct Costs
Expenditure
Total Costs
Variable Costs
16
A loss is made by a business when....
Its costs are higher than its revenue
When its variable and fixed costs are the same
Its revenue is higher than its costs
Its costs are the same as its revenue
17
Which of the following is a cost of sales for a bakery?
Telephone bill
Ingredients e.g. Flour
Advertising
Wages
18
Sales Revenue - Cost of Sales = ?
Break Even Point
Net Profit
Cash Flow
Gross Profit
19
Choose two ways in which you can improve your profit.
Increase your cost of sales
Increase your sales revenue
Reduce your overheads
Reduce your selling price
20
What is an advantage of using break even analysis?
You can see what would happen if your costs changed
All of the above
It can help you set targets for sales
You know how many products you need to sell to cover costs

Duplicate of Finance Terminology Flashcards | StudBud