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3.3 True or false quiz

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  • Unit 3 - Finance/
  • 3.3 Costs and revenues/
  • 3.3 True or false quiz

Unit 3.3 True or False Quiz - Costs and revenues

To test your understanding of this topic (Costs and revenues), answer the following true or false questions.

No.StatementTrue or False?
1.Total revenue for the sales of a product is calculated by multiplying the number of units sold by the selling price.

True

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

True

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

False - it is total revenue minus total costs

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

True

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

True

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

False - these are direct costs

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

True

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

True

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

True

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

False

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

False

12.A firm has fixed costs of $9,000, output of 1,000 units, and variable cost per unit of $5. The total costs of output is then equal to $15,000.

False - it amounts to $14,000

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

True

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

True

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

True

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

True

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

True

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

False - the charges do not vary with the output level

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

True

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

False - these vary with the level of output

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