Question detail
MetroMove serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?10,962, sales of 592 units, and a 41% change in costs or demand. Which option best applies Distinguish variable costs, fixed costs and total costs?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Financial terms and calculations
Question
- A. Use total costs, variable costs, fixed costs to judge supplier lead time, owners impact, and the business objective in Costs, revenue, profit and loss.
- B. Give only a definition of Financial terms and calculations without using the case evidence.
- C. Treat fixed and variable costs as identical and ignore the effect on owners.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use total costs, variable costs, fixed costs to judge supplier lead time, owners impact, and the business objective in Costs, revenue, profit and loss.
Explanation
This option works because Use total costs, variable costs, fixed costs to judge supplier lead time, owners impact, and the business objective in Costs, revenue, profit and loss. The case evidence gives ?12,462, 592 units, and 41%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse fixed and variable costs, miss the owners, or ignore the business objective.
Common mistake
Costs, revenue, profit and loss common mistake 1
Giving a vague answer instead of directly addressing: Distinguish variable costs, fixed costs and total costs..
Answer by clearly explaining how to distinguish variable costs, fixed costs and total costs..
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