Ch 26
A unit of sale is A) what a customer actually buys from you B) the amount of product or service you use to calculate your costs and profit C) the basic building block of your business D) all of the above
D
If you operate a service business, you cannot calculate your contribution margin by using a unit of sale. True False
False
If you have created an app that you are selling on Google Play, your economics of one unit will include the commission you pay to Google Play for every sale as a variable expense. True False
True
Shipping and handling charges are examples of variable expenses. True False
True
The contribution margin for one unit takes into account the business's variable expenses. True False
True
The cost reduction made possible by spreading costs over a larger volume is called a economy of scale. True False
True
A wholesaler's cost of goods sold per unit includes labor True False
False
Regular monthly salaries and utilities are examples of variable expenses. True False
False
The unit of sale for a wholesaler is the same as for a retailer True False
False
The variable expense that is associated with each unit of sale is called COGS, which stands for Capacity of General Sales True False
False
In a service business, which of the following does not apply? A)COGS B) EOU C) Contribution Margin D) Variable Expenses
A
A business expense that changes based on the amount of product or service sold is a fixed expense. True False
False
In a wholesale business, the cost of goods sold does not include A) materials B) labor C) commissions D) shipping and handling
B
The amount per unit that a product contributes toward a business's profit before fixed expenses are subtracted is the... A) unit of sale B) contribution margin C) economy of scale D) EOU
B
An example of a typical variable expense is... A) cost of electricity B) yearly rent C) commission for salespeople D) internet access
C
The variable expense that is associated with each unit of sale is called A) OFX B) UR C) COGS D) I SAID UR
C
An example of a fixed expense is A) Rent B) Monthly Salaries C) Utilities D) All of the the above
D
The cost reduction made possible by spreading a business's costs over a larger volume of purchases is called... A) depreciation B) savings of mass quantities C) big buying D) economies of scale
D
An expense that isn't affected by the number of items a business produces is a fixed expense. True False
True
Because a wholesaler buys finished products from a manufacturer, its cost of goods sold per unit doesn't include labor True False
True
EOU stands for economics of one unit. True False
True
If you sell silk-screened T-shirts for $15, your COGS is $5 and your other variable expenses per unit are $3, your contribution margin per unit is $7. True False
True
If your selling price per unit is $22, your COGS is $6 and your other variable expenses per unit are $7, your contribution margin per unit is $9 True False
True
Rent is an example of a fixed expense. True False
True
The variable expenses that are associated with each unit of sale are called the Cost of Goods Sold True False
True
