Finance 1. A variable cost is: a. A cost which changes with activity b.

A cost which stays the same no matter what is happening c. A cost which is valuable d. A cost which is not important 2. A fixed cost is: a. One which never changes b. One which does not change within a certain level of activity c. One which is fixed by managers d. One which changes with what you are doing. 3. A prime cost is: a. All the direct costs b. All the indirect costs c. All the costs of making a product. d. This is the most important cost. 4. A direct cost may also be called a 5. An indirect cost may also be called an 6. Please give me 3 examples of direct costs

7. Please give 3 examples of indirect costs

8. The contribution is the difference between Selling Price and Variable Costs T/F 9. The contribution may also be called the Margin. T/F

10. The breakeven point is where Total Costs = Total Revenue T/F 11. When the firm is achieving breakeven sales it is making a profit. T/F

12. When a firm is achieving breakeven sales it is making a loss. T/F 13. Total Overheads + Total Prime Cost is = Total Costs T/F

14. Please label the following as Direct or indirect costs. a. Material for Product A b. The salary for the workshop manager. c. The pay for the machine operator in the workshop d. The cost of hiring the security guard for the workshop e. The electricity used by the production machines. f. The electricity used by the offices g. The paint used on the products h. The paint used on the workshop i. The cleaning costs for the machinery j. The oil used to make the machinery work well k. The oil used in the making of the products l. The fuel used to transport the goods to a customer m. The fuel sold by a garage.

15. The margin of a product is 10, the variable cost is 15, what is the Selling price of the product. 16. The selling price is 30, the direct costs are 15, what is the margin? 17. The margin is 15, the selling price is 40, what is the variable cost

18. You have been given this information. Breakeven in units 2 000, Selling Price 10, Variable Costs 5. What is the Total Fixed Cost? 19. You have been given this information. Total Fixed Costs 100 000, Variable Costs 5, Selling price 15. Calculate the BEP in a. Units b. In pounds 20. You are told the variable cost is 10, the breakeven point in units is 10 000, Fixed costs 200 000. Calculate the Selling price.