IB 11 BM UNIT 3 Test

The cost of wages for factory workers and the raw materials costs of production are classified as variable costs.

A bank loan from HSBC, a publicly held company, is an example of a source of finance obtained from the public sector.

The salaries of senior executives are classified as a fixed cost.

What constitutes a business's main goal?

What does Corporate Social Responsibility (CSR) refer to?

The available revenue for a business comes from money generated from the sale of good/services and non-trading revenue.

Packaging costs can be classified as a fixed cost of production.

The cost of raw materials is an example of variable costs of production for a manufacturing firm.

A disadvantage of a bank loan that interest repayments must be made even if the business is making a loss.

A disadvantage of leasing is that at the end of the lease contract the hirer has to return the goods.

Share capital is an example of an internal source of finance.

To calculate total costs of output, both total fixed costs and total variable costs are added together.

Fixed costs do not change due to changes in the level of output.

An e-commerce platform has various revenue streams. Identify the one that is not a revenue stream for the

An example of short-term finance is bank overdrafts.

Direct costs refer to the costs that are clearly identified with the production of a specific good or service.

Above the line marketing by placing advertisements in local and national newspapers be an example of variable costs.

The purchase of fabrics would be classified as a fixed cost of production for a textiles manufacturer.

Total revenue for the sales of a product is calculated by multiplying the number of units sold by the selling price.

What do the letters MNC stand for?

Costs that change in proportion to the amount of output produced are known as indirect costs.

Telephone charges for a clothes retailer can be classified as a variable cost.

profit or loss of a business can be calculated by using deducting the total cash outflows from the total cash inflows.

The cost of meals and drinks on board a commercial flight are classified as a direct cost for an airline company.

An advantage of using retained profit as an internal source of finance is the lack of interest charges.

Spending money on wages and salaries is an example of revenue expenditure.

Spending money on a new cybersecurity system is an example of capital expenditure.

Issuing of shares as a source of finance is not available to a sole trader or ordinary partnership.

A business angel provides finance and expertise to small business start-ups, e.g. organizing networking opportunities.

An overdraft allows businesses to spend more than they have in their bank account so help in settling short-term debts.

Triple bottom line is defined as:

Security, professional accountancy fees, and rent of a production facility are all fixed costs for a car manufacturer.

SMART is an acronym used to describe how a business should structure its goals. It stands for:

Rent, salaries, and marketing costs are all examples of fixed costs.

A rise in the exchange rate would directly affect the amount of interest paid by a business on a bank loan.

A firm fixed costs $9,000, output 1,000 units, variable cost/unit of $5. The total costs of output equal to $15,00

Crowdfunding raises finance for a business project by getting small amounts of money from a large number of people

Costs that are not directly incurred in the production process are known as indirect costs.

The sale of debentures and the interest received from deposits at a bank can be classified as non-sales revenues.

Business angels are investors who provide grant to businesses approved by the government.