1 A Gross Profit Margin is:

A measure of profitability that shows the percentage of revenue that exceeds the cost of goods sold (COGS)

The ratio of net profits to revenues for a company or business segment

The income received by a company from its sales of goods or the provision of services

The absolute dollar amount of revenue that a company generates beyond its direct production costs

2 Menu engineering should consider (1) contribution margin, (2) popularity of a menu item and (3) customer demand.

Select one:

True

False

3 Which two components can the flexible budget variances be broken down into?

Price or cost variances and quantity variances

Labour cost variance and actual variable labour hours

The difference between the static budget and flexible budget

The actual price and the budgeted price

4 What does the supply and demand analysis show?

The number of each item sold per period

That there is a market for the business

How the company will pay for all the costs

The relevant and irrelevant costs

5 Net present value (NPV) and internal rate of return (IRR) are two capital budgeting methods.

True

False

6. How is the static budget variance calculated?

By finding the difference between the budgeted cost and actual cost

By multiplying the difference between direct labour hours and budgeted direct labour hours

By multiplying the difference between the actual price and the budgeted price

By finding the difference between the static budget and the actual results

7 The budgeted quantity used for:

The static budget

The actual sales volume

The budgeted cost

The budgeted labour

8 Value-based pricing is a method in which a business sets prices based on what competitors may charge for similar items.

Select one:

True

False

9 What does the residual (or salvage) value of an asset refer to?

The present value factor from the Present Value Factors of an Annuity table

The time value of money

The difference between the value of cash inflows and the value of cash outflows

The value that an asset can be sold for at the end of its useful life

10 Relevant costs are costs that differ between alternatives in a specific decision.

Select one:

True

False