Business Plan Chapter 7 Quiz
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Questions and Answers

Which of the following is NOT a component of an organizational and management plan?

  • Management team credentials
  • Marketing strategy (correct)
  • Organizational structure
  • Legal form of the business

    • The logo of a business can be a replication of existing logos if it is slightly modified.

    False

    What is an organogram?

    It is a visual representation of an organizational structure showing roles and lines of reporting.

    The organizational plan must clearly state the business's __________.

    <p>name</p> Signup and view all the answers

    Match each type of business form with its description:

    <p>Sole Proprietorship = Owned by a single individual Partnership = Owned by two or more individuals Corporation = A legal entity separate from its owners Limited Liability Company = Combines elements of partnership and corporation</p> Signup and view all the answers

    Which of the following is NOT a common source of recruitment?

    <p>Job fairs</p> Signup and view all the answers

    The training strategy occurs before the selection of candidates.

    <p>False</p> Signup and view all the answers

    What is the purpose of a recruitment strategy?

    <p>To generate a pool of job applicants who are interested in working for the organization.</p> Signup and view all the answers

    The first step in the selection process is the ______.

    <p>preliminary interview</p> Signup and view all the answers

    Match the following recruitment sources with their descriptions:

    <p>Internal transfer = Promoting an employee from within the organization Press advertisement = Public posting of job openings in media Employee recommendation = Current employees refer candidates Executive search = Hiring a firm to find top talent</p> Signup and view all the answers

    What is the purpose of assumptions in the context of noncurrent asset requirements?

    <p>To determine noncurrent asset prices and estimated life</p> Signup and view all the answers

    Pre-operating expenses can be capitalized and amortized over three years if deemed significant.

    <p>True</p> Signup and view all the answers

    Name two activities that may incur pre-operating expenses.

    <p>Conducting feasibility studies, business registration</p> Signup and view all the answers

    The planned layout of the office must be ___ and presented.

    <p>drawn</p> Signup and view all the answers

    Match the following terms with their descriptions:

    <p>Noncurrent Assets = Long-term assets that are not expected to be converted to cash within a year Office Layout = Arrangement of office equipment and furniture Pre-operating Expenses = Costs incurred before the business starts operations Maintenance Plan = Strategy for upkeep and repair of assets</p> Signup and view all the answers

    Which of the following is NOT a pre-operating activity?

    <p>Monthly salary payments</p> Signup and view all the answers

    The total pre-operating expenses are included in the organisation and management overhead costs.

    <p>True</p> Signup and view all the answers

    Name one expense item that is considered part of organisation and management overhead costs.

    <p>Salaries</p> Signup and view all the answers

    Obtaining samples is a part of ______ expenses.

    <p>pre-operating</p> Signup and view all the answers

    Match each item with its category:

    <p>Salaries = Organisation and management overhead costs Trial production = Pre-operating expenses Training of employees = Organisation and management overhead costs Business Registration = Pre-operating expenses</p> Signup and view all the answers

    Which of the following is an example of an expense incurred during organisation and management?

    <p>Telephone charges</p> Signup and view all the answers

    Electricity and water costs are classified as pre-operating expenses.

    <p>False</p> Signup and view all the answers

    What is the purpose of estimating pre-operating expenses?

    <p>To prepare financially for starting a business.</p> Signup and view all the answers

    What is a key component of orienting and training new employees?

    <p>Articulated strategies for training</p> Signup and view all the answers

    The cost of administrative personnel includes both salary and benefits.

    <p>True</p> Signup and view all the answers

    What types of equipment are considered noncurrent assets for administration?

    <p>Vehicles, computers, printers, and furniture.</p> Signup and view all the answers

    The total cost of administrative personnel can be projected using __________.

    <p>Table 7.1</p> Signup and view all the answers

    Match the following terms with their descriptions:

    <p>Salary = Regular compensation paid to employees Depreciation = Reduction in value of an asset over time Benefits = Additional perks provided to employees beyond salary Noncurrent Assets = Long-term resources used in business operations</p> Signup and view all the answers

    Which of the following is NOT a component required for preparing an organisation and management plan?

    <p>Product pricing strategy</p> Signup and view all the answers

    Estimations for salaries and expenses must be made based on relevant data and applicable rules.

    <p>True</p> Signup and view all the answers

    What is the purpose of Learning Activity 7.1?

    <p>To facilitate learners in preparing an organisation and management plan for their proposed business.</p> Signup and view all the answers

    The total organisation and management expenses before depreciation and __________ expenses must be clearly stated.

    <p>pre-operating</p> Signup and view all the answers

    Match the components required for an organisation and management plan with their descriptions:

    <p>Legal form of the proposed business = Type of business structure (e.g., LLC, corporation) Key positions and their roles = Description of important roles in the organisation Cost of administrative personnel = Financial estimation for staff salaries Noncurrent asset requirement = Assets necessary for long-term operational purposes</p> Signup and view all the answers

    Study Notes

    Organizational and Management Plan Overview

    • The organizational and management plan is a key component of the business plan, outlining the legal structure, organizational hierarchy, management credentials, and financial estimates.
    • This plan highlights the business's legal form, key roles, and noncurrent asset requirements.
    • Defines three main business forms: sole proprietorship, partnership, and corporation.
    • Entrepreneurs must explain their choice of business type.
    • The plan should specify the chosen business name and include a logo, which should be unique and comply with intellectual property laws.
    • Legal naming requirements must be honored to avoid duplication.

    Capability of the Proponents

    • A detailed profile of the proponents should include educational qualifications, professional experience, skills, and relevant background information.

    Organizational Structure

    • The proposed business should depict a clear organizational structure that defines roles, communication lines, and reporting relationships.
    • Different organizational models such as line and functional structures can be utilized.

    Key Positions and Roles

    • Identification of key positions is crucial, with clearly described responsibilities associated with each role.

    Recruitment, Selection, and Training of Staff

    • Recruitment Strategy: Methods to attract applicants include internal transfers, advertisements, educational institutions, and employee referrals.
    • Selection Strategy: Procedures should encompass preliminary interviews, application checks, and tests tailored to job requirements.
    • Training Strategy: New employees must receive thorough orientation and ongoing training for effective performance.

    Estimation of Pre-Operating Expenses

    • Pre-operating expenses involve costs incurred before business commencement, including feasibility studies, registrations, and supplier agreements.
    • Significant pre-operating expenses may be capitalized and amortized, typically over three years.

    Organization and Management Overhead Costs

    • Overhead costs encompass salaries, office supplies, utility bills, and maintenance of noncurrent assets.
    • A comprehensive projection of these costs is essential for financial planning over a three-year period.

    Assumptions

    • Assumptions related to asset requirements, pricing, and longevity are necessary for accurate financial estimations and must be explicitly stated for clarity.

    Noncurrent Assets Requirement for Administration

    • Noncurrent assets such as computers, printers, and office furniture are vital for administrative functions.
    • Detailed specifications, quantities, purchase prices, and depreciation estimates should be included.

    Office Layout

    • The office layout refers to the strategic arrangement of equipment and furniture to facilitate efficient workflow.

    Organizational and Management Expenses

    • Expenses must be thoroughly outlined before accounting for depreciation and pre-operating costs to give a complete overview of organizational financial health.

    Learning Activity

    • Students are encouraged to create a comprehensive organizational and management plan for a proposed business using provided components, ensuring alignment with previously learned concepts.

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    Description

    Test your knowledge on the organizational and management overhead costs as outlined in Chapter 7 of the business plan. This quiz covers key concepts such as the organizational structure, management team roles, and asset requirements. Perfect for students looking to deepen their understanding of business planning.

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