What is a historical figures budget?

A budget set using current financial figueres

What is the formula for total contribution?

Contribution per unit x sales quantity

What is the formula for break even?

Total revenue = variable costs + fixed costs, Total revenue = total costs

Costs that do not change with the level of output

What is the margin of safety?

Break even point - current level of output

What is the formula for sales volume?

Sales volume = sales revenue / price

What is the purpose of sales forecasting?

To see if a business will need to employ more people

What is the definition of break even?

The point at which revenue equals expenditure

A financial plan and an agreed spending limit for a business

What is the formula for sales revenue?

Price x quantity, Sales volume x price

What is favourable variance?

The manager has spent under the budget

What are variable costs?

Costs that do vary with level of output

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Edexcel A Level Business Financial Planning

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#Salesforecasting #Salesrevenuecosts #breakeven #Budgets #financialplanning

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Questions 25

Answers

1
What is a difficulty of sales forecasting?
Data may not be correct
Can be used to know when to employ more people
Can be used to help the business stay profitable
It shows what sales are likely to be like
2
What is a historical figures budget?
A budget set from the last owner
A budget set using random financial figures
A budget set using current financial figueres
A budget set for last year
3
What is the formula for total contribution?
Contribution per unit - sales quantity
Contribution per unit / sales quantity
Contribution per unit + sales quantity
Contribution per unit x sales quantity
4
What is the formula for break even?
Total revenue = variable costs x fixed costs
Total revenue = variable costs + fixed costs
Total revenue = variable costs - fixed costs
Total revenue = total costs
5
What are fixed cost?
Costs that do not change with the level of output
Money from sales
The money left over after the expenditure has been taken
Costs that do change with the level of output
6
Which factor affects sales forecasts?
Consumer trends
Actions of competitors
All of them
Economic variables
7
What is the margin of safety?
Break even point - current level of output
Total costs = total revenue
Sales revenue / price
Fixed costs + variable costs
8
What is the formula for sales volume?
Sales revenue = sales volume / price
Price = sales revenue x sales volume
Sales volume = sales revenue / price
Sales volume = price / sales revenue
9
What is the purpose of sales forecasting?
To see the money flowing in or out
Need to decrease promotional activity
To see if a business will need to employ more people
Reduce productive capacity
10
Why would a business set a budget?
Control over finance
To help decisions
All of the above
Motivation
11
What is the definition of break even?
The point at which revenue equals expenditure
The point where expenditure is more than revenue
The point where revenue is more than expenditure
The point when the company has sold 0 units
12
What does break even analysis assume?
Costs will increase
The prices are different
All items are different
Every product is sold
13
What is an example of fixed costs?
Rent
Raw material
Wages
Lease of machinery
14
True or False: Zero based budget is based on potential performance
False
True
15
What is a budget?
A balance sheet
Unlimited sum of money given to spend
A financial plan and an agreed spending limit for a business
A profit and loss account
16
What is the break even formula?
FC - C
FC / C
FC + C
FC / (SP - VC)
17
What is the formula for contribution?
Selling price / variable cost
Selling price x variable cost
Selling price + variable cost
Selling price - variable cost
18
What is adverse variance?
The manager has underspent
The manager has spent nothing at all
The manager has overspent
19
What is the formula for sales revenue?
Quantity / price
Price x quantity
Total costs + variable costs
Sales volume x price
20
True or False: Sales revenue is the money into the business through sales
False
True
21
What is favourable variance?
The manager has spent over the budget
The manager has spent nothing at all
The manager has spent under the budget
22
What are variable costs?
Costs that donot vary with level of output
Costs that do vary with level of output
23
True of False: Profit/Loss = total contribution + fixed costs
False (P/L = TC - FC)
True
24
What are the difficulties of budgeting?
Budgets are flexible
Budgets are beneficial
Budgets are fixed for a year
Budgets help in the long term
25
What is an example of variable costs?
Leasing machinery
Rent
Wages
Raw materials

Edexcel A Level Business Financial Planning Flashcards | StudBud