Question detail
BeanBarn serves price-sensitive customers while using retained profit; the case evidence includes break-even output of ?11,198, sales of 358 units, and a 35% 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 labour productivity, lenders 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 revenue and profit as identical and ignore the effect on lenders.
- 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 labour productivity, lenders impact, and the business objective in Costs, revenue, profit and loss.
Explanation
The option is correct because Use total costs, variable costs, fixed costs to judge labour productivity, lenders impact, and the business objective in Costs, revenue, profit and loss. The case evidence gives ?12,698, 358 units, and 35%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse revenue and profit, miss the lenders, 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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