Question detail
CraftCrate serves commuters while opening a second outlet; the case evidence includes net profit margin of ?8,607, sales of 207 units, and a 42% 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 customer retention, shareholders 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 efficiency and productivity as identical and ignore the effect on shareholders.
- 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 customer retention, shareholders impact, and the business objective in Costs, revenue, profit and loss.
Explanation
This is the best-supported choice because Use total costs, variable costs, fixed costs to judge customer retention, shareholders impact, and the business objective in Costs, revenue, profit and loss. The case evidence gives ?10,107, 207 units, and 42%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse efficiency and productivity, miss the shareholders, 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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